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After a new memecoin Pepe hit the market with a massive surge, this hyper-speculative, ultra-volatile, and peculiar type of cryptocurrency has regained attention.
Cryptocurrency trading – illustrative photo. Image credit: Kanchanara via Unsplash, free license
This specific crypto coin defied many expectations. Even its logo was inspired by an internet meme featuring an anthropomorphized frog. But this did not impede its trading results. Just within 17 days after it was launched on April 16th, Pepe skyrocketed by almost 7,000%.
Now, Pepe has attained a market value of $1.8 billion as of May 5th, based on data from CoinGecko.
The meteoric ascent of Pepe has sparked investor enthusiasm in memecoins in general. Trading volumes surged to $2.6 billion in the first week of May from $408,000 the prior week, according to data from Dune Analytics.
As Bitcoin’s sprint of 2023 loses momentum, the recent surge in memecoins has taken the spotlight. The leading cryptocurrency, Bitcoin, has experienced a 6% decline since mid-April, currently trading at $27,416.
Previously, Pepe traded at fractions of a cent. It also saw a 60% drop from its peak on May 5th. Nevertheless, it still holds a substantial market capitalization of nearly $740 million, taking the position as the third-largest memecoin.
Dogecoin cryptocoins – illustrative photo. Image credit: Kanchanara via Unsplash, free license
The two first positions in this top-list are taken by dogecoin and shiba inu. Both of these crypto coins originated as internet jokes related to a Japanese dog breed. The market values of these two memecoins surpass $10 billion and $5 billion, respectively.
And, one of the most peculiar things is the fact that the creators of pepe remain unidentified.
Many market experts caution against the potential risks associated with memecoins, warning that traders and investors could suffer significant losses.
Even Pepe’s website claims that it was launched with a ‘focus on the people’, lacking a formal team or a roadmap. It states that the coin serves no practical purpose, is solely meant for entertainment, and is otherwise “completely useless”.
Despite these obvious ‘red flags’, Pepe has become the fastest-growing cryptocurrency built on the Ethereum blockchain, which is the second-largest blockchain platform.
The rapid rise in Pepe’s popularity was further fueled by its swift listing on major centralized exchanges, including the prominent platform Binance. But Binance also acknowledged on its website, that Pepe has no utility or value support mechanism.
Furthermore, the trading platform highlights the coin’s volatility and explicitly states that the platform will not assume responsibility for any trading losses incurred by users.
The experts say that similar to other cryptocurrencies, the success of memecoins generally heavily relies on retail trading and is often influenced by online sentiment.
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