Twitch decline - PumpFun emerging
Pump started as a memecoin launchpad platform. Now, it represents the crypto capital markets - CCM.
Twitch has been in decline since 2021. The platform boomed during COVID, but lost momentum once the pandemic ended. New competitors are now cutting into its market share, by given more incentives to creators. YouTube holds second place, while Kick is rapidly growing in third.
Twitch is valued near $50 billion, with $1.8 billion in annualized revenue and 20.8 billion hours watched in 2024 by 2.37 million users. Its audience is very young: 41% are 16–24, 32% are 25–34, and 17% are 35–44. In total, 73% of users are under 35.
Revenue comes from subscriptions, ads, and Bits (donations). Subscriptions are split 50/50 with creators, or 70/30 for top streamers. Ad revenue is also shared. Twitch takes a 30% cut on Bits. This model delivers an estimated 40% gross margin, or $720 million in gross profit.
On twitch listeners to have no upside with the creators, they support the creator with subs and bits, but it is “spending” capital. Pump disrupts this model, by given an alliance between the performance of the streamer with the listener, creating a community major force creating creator tokens that are price driven, speculative and align with the incentives of the streamer.
Pump generated $865 million in revenue and $705 million in gross profit over the last year—despite having only 1.5% of Twitch’s active users and a team of just 10 employees (versus Twitch’s 4,400).
Pump is positioned to scale the Twitch’s down trend, but attracting new, innovative or even hold streamers to pump livestream app. It offers creators new ways to earn, shares revenue more fairly, and buys back 25% of total revenue to reward token holders. This creates strong alignment between creators, users, and investors.
Pump’s livestreaming is still far smaller in scale, but its overall profitability already surpasses Twitch’s. With a lean team, its costs are a fraction of Twitch’s.
Twitch holds a predictable $45 billion valuation. Pump is valued at $8.5 billion FDV, but successful market capture could push it far beyond $45 billion. Reasons include:
Revenue per employee is 211× Twitch.
Revenue per user is 32.5× Twitch.
Price-to-sales ratio is 40% of Twitch.
Gross profit multiple is 19% of Twitch.
Growth trends are opposite: Twitch hours watched are down 3% YoY, while Pump is scaling fast.
If Pump continues to deliver and attract creators, its valuation could exceed $100 billion.
Notably, Twitch has more streamers than active users—7.21 million streamers for 2.27 million users. Pump simply needs to capture these creators, which is the key to its growth.
The macro thesis: livestreaming is driven by younger generations. Around 70% of viewers are under 35, with Gen Z making up the core. This group is deeply engaged with crypto, memecoins, and attention-driven online culture. Pump aligns perfectly with these interests, combining streaming with crypto incentives and creator-driven economics. It represents the next stage of the creator economy.
No utility memecoins, are worth already billion of dollars, just for being a pure meme, that for some reason community are align. Pump is pushing this coins mcap to the limit, by given a face to each coin, that could lead by creators coin being worth multiple millions of dollars or even a billion dollar mcap.
Thanks to read,
Joao