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Memcoins have been an integral part of the cryptocurrency space since the inception of Dogecoin in 2013, when fortunes were made and busted in equal measure. But the new token on the block has caused a stir in recent weeks as Pepecoin (PEPE) grabs some of the memcoin market share from intrepid investors.
As previously reported, the value of Pepecoin rose by 2000% after its launch at the end of April 2023. The reason for the token rally is primarily due to the zealous hype around memcoin, when the project was widely circulated on Twitter over the past month.
today. $PEPE #MMGA pic.twitter.com/Adf0Vem8B3
— Pepe (@pepecoineth) April 14, 2023
The Pepecoin website itself is waving a final disclaimer, labeling $PEPE as “a meme coin with no intrinsic value or expectation of financial return.” The project also stipulates that it does not have an official team or roadmap and that the token is “completely useless and for entertainment purposes only.
Data analytics firm Nansen provided valuable data and key insights following PEPE’s market capitalization surge. Research analyst Xin Yi has calculated that the total market value of memcoins is around $20 billion, with the top five tokens, DOGE, SHIB, PEPE, BABYDOGE and FLOKI, accounting for over $18 billion in value.
Data provided by Nansen Query shows a sharp jump in the value of the token and the market capitalization of PEPE compared to the other five largest memcoins. Yi also notes that the infographic doesn’t tell the whole story, given that the PEPE data reflects its listing on Coingecko, which came out a couple of weeks after its inception.
Yee told Cointelegraph that the social aspect of memcoin remains a major driver of investor sentiment and action, highlighting, for example, Elon Musk’s infamous Dogecoin advertisements and rampant Twitter bots bringing memcoin hashtags up to date on Twitter:
“Because memcoins have no intrinsic value, they depend on catalysts such as social significance, and events such as 4/20, known as DOGE day, can also affect token prices.”
As mentioned earlier, Nansen provides data analytics and information about smart money traders and holders by marking wallets and tracking trades. The rise of PEPE has also attracted a significant number of smart money holders, according to on-chain data highlighted by Yi. She added that several thousand traders could benefit from the rise in the value of memcoins, which is a gamble given that many other memcoins are pump and dump or “pull” operations:
“However, the returns on one good coin can easily outperform the value of other “bad” coins, which is probably why these memcoins remain attractive to most traders. Therefore, it really depends on the investor’s risk appetite.”
However, Yi also pointed to the inherent risks of memcoins, which often lead to liquidity shortages with large token holders dumping their holdings, causing smaller investors to suffer losses.
Related: Ethereum gas fees jump on memcoin frenzy with mixed comments on network usability
A number of cryptocurrency exchanges have listed PEPE since its launch and subsequent investor attraction, including OKX, MEXC Global, Bitget, Gate.io, and Huobi. Pepecoin
