On-Chain Pokémon Card Sales Cool for the First Time, Are Speculative Funds Shifting to Memecoins?

Author: Marc Arjoon & Jake Koch-Gallup, Blockworks

Compiled by: Shenchao TechFlow

Senchao Insight: On-chain gacha has experienced its first monthly pullback since February, with July's trading volume dropping from June's $354.8 million to $290.3 million. Meanwhile, trading volumes on Memecoin platforms like Pump.fun are on the rise. This suggests that crypto speculative funds may be rotating—when Memecoin markets heat up, some gacha players may exit. Notably, Courtyard, which has the least crypto-centric user base, has set a new historical high, indicating that genuine collector demand remains strong.

The market is quiet but lacks a final push! Market volatility and asset correlation continue to decline, entering a calmer state. This leaves the last piece of the puzzle for a new bull market. At the same time, on-chain gacha has seen its first monthly pullback since February, indicating that some speculative funds may be flowing back into Memecoins. Let's analyze further.

Market Dynamics {#article-toc-33130-2}

In the past 24 hours, the 2025 crypto stock sector led the market with a 2.6% increase, being the only significantly rising sector. Gains were concentrated in Galaxy (+3.6%) and Circle (+3.1%), both of which just released their Q2 earnings reports. Circle benefited from a prior 64% cut in Morgan Stanley's target price to $38, leading to low expectations. However, the strength is quite narrow. Bullish (-1.5%) and Gemini (-0.6%) fell, with the broader crypto stock index down 1.1%. This indicates that the upward trend is driven by company-specific earnings reactions rather than a reevaluation of the entire sector.

Outside of this sector, market performance has been generally negative. As the stock market consolidates below record highs this week, BTC has dropped 0.4%, aligning closely with gold (-0.4%) and the S&P 500 (-0.3%). BTC's demonstrated downside resilience in response to the stock market pullback has again failed to translate into upward participation. The relative strength is instead an internal crypto story. BTC sits atop the digital asset sector, with long-tail assets selling off, led by Meme (-5.0%), the Solana ecosystem (-3.4%), and AI (-2.7%).

As mentioned in yesterday's article, we know that crypto ETF fund flows have been weak. The ETF fund flows for BTC and ETH are becoming increasingly synchronized. Their 60-day rolling correlation has risen to +0.67, nearing the upper range. ETF demand behaves more like a single crypto configuration, which is not surprising as this often occurs in declining markets.

Fortunately, overall correlation has been on a downward trend since March 2026. This has led to a weakening of overall market interconnectedness, creating a more differentiated trading environment.

Similarly, market volatility has decreased from over 60 in March to just over 30 in August. The decline indicates that the market is entering a calmer state, with readings now comfortably below risk thresholds.

With declining market volatility and correlation, the only remaining factor to kick off a new bull market is a sustainable rise in BTC prices.

Gacha Cooling Down {#article-toc-33130-3}

On-chain gacha has been one of the hottest sectors in crypto in 2026, but July marked the first monthly pullback since February.

In July, total spending on on-chain gacha reached $290.3 million, the second-highest monthly total ever, only behind June's record of $354.8 million. For the fifth consecutive month, Collector Crypt was the largest gacha platform, generating $154.9 million in spending, accounting for 53% of July's total. However, Collector Crypt's monthly spending decreased by 26% from June's $209.5 million.

Courtyard set a record for the best monthly performance in July, reaching a historical high of $85.3 million, a 7% increase month-over-month. Courtyard's performance is particularly noteworthy as it likely has the least crypto-centric user base among major platforms. Its continued growth indicates that on-chain gacha resonates as a product category beyond the existing on-chain user base. Courtyard accounted for 29% of July's gacha spending.

Platform rankings have also shuffled, with Monster surpassing Phygitals and Beezie to become the third-largest gacha platform in July. Monster generated $14.3 million in trading volume, a 15% increase, and released a series of updates aimed at improving user experience:

• Lucky Boost - Opening a pack to receive a common card increases the expected value of the next pack by 0.1%.
• Dupe Shield - Drawing the same card in consecutive packs gives users a free pack.

These updates were launched on July 17 and 23 respectively. From the launch of Lucky Boost to the end of the month, Monster generated $9.7 million in trading volume, accounting for 68% of its total for July.

Phygitals ($13.4 million, down 34%) and Beezie ($12.9 million, down 30%) both experienced down months despite launching significant product updates. Phygitals launched a mobile app at the end of the month, while Beezie expanded to Solana on July 23. Overall, the top five gacha platforms (Collector Crypt, Courtyard, Monster, Phygitals, and Beezie) accounted for 97% of July's on-chain gacha spending.

Looking at on-chain gacha in a broader context, trading card secondary market volumes have remained at historical highs of $694.7 million, compared to $695.6 million in June. The weakening demand for trading cards is not the reason for the decline in July's on-chain gacha.

It is also possible that a month of decline does not have much to interpret. On-chain gacha spending grew at an astonishing rate in the first half of 2026, making some degree of pullback inevitable. However, another possible explanation is that on-chain gacha is facing new competition for attention and funds from crypto-native traders.

Throughout July, while Collector Crypt's spending declined, Pump.fun's trading volume increased. Collector Crypt's average daily spending dropped from $5.6 million in the first seven days of July to $3.4 million in the last seven days, a 39% decrease. During the same period, Pump.fun's average daily trading volume rose from $320.6 million to $388.5 million, a 21% increase. This relationship does not necessarily imply causation, but intuitively makes sense. A significant portion of Collector Crypt's user base consists of active on-chain traders who rotate to any hot sector. When Memecoins regain momentum, some of the funds and attention flowing into on-chain gacha may shift elsewhere, even if trading card demand remains strong.

Courtyard's performance further supports this possibility. While most crypto-native gacha platforms experienced pullbacks, Courtyard set a historical high in July. As mentioned earlier, Courtyard likely has the least crypto-centric user base among major platforms, meaning its users may be less inclined to rotate back to Memecoins when speculative activity heats up.

At present, the decline in July appears more like a natural pullback, potentially amplified by a revival in Memecoin activity, rather than evidence of a broader slowdown in the trading card market.

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