Wednesday, April 24, 2024

PepeCoin’s Ascent to Supremacy and Other Memecoins You Love to Hate

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In the midst of a generally challenging trading environment, Pepecoin (PEPE) may encounter hurdles, as suggested by a recent Santiment report.

The swift ascent of Pepecoin (PEPE) to a market cap of $1.5 billion over a few weeks was not primarily driven by retail traders. Despite the token’s substantial daily volumes, amounting to billions of dollars thanks to major crypto exchanges like Gate.io, and a proliferation of imitators, retail trader participation remained relatively low. This insight is drawn from an extensive report released by Santiment, a leading on-chain analytics firm.

What do the numbers say?

Santiment’s analytical study contrasted the trading and liquidity metrics of Pepecoin with those of Shiba Inu (SHIB) and Dogecoin (DOGE) – meme tokens themed after the Shiba Inu dog breed. These tokens had a combined worth of a staggering $160 billion at their peak. The report highlighted that Dogecoin and Shiba Inu reached impressive peak trading volumes of $70 billion and $40 billion respectively, while Pepecoin trailed with a significantly lower peak volume of $2 billion.

However, an essential context to consider is that Pepecoin achieved these volumes during a bearish market, characterized by reduced liquidity as key market players reduced their cryptocurrency trading strategies. This circumstance may indicate a potential for future expansion when market conditions improve.

The report further noted that the lack of liquidity and retail participation in Pepecoin’s market compared to what Dogecoin and Shiba Inu experienced in previous years is significant. This situation has resulted in “declining volumes” for meme coin projects among retail traders, who operate outside of Crypto Twitter, which may not accurately reflect a token’s real-world popularity or influence.

Even with the existing differences in trading activity and market liquidity, Pepecoin’s presence in cryptocurrency-focused media platforms matches the levels achieved by Dogecoin and Shiba Inu at their respective heights, according to data from Santiment. Social volume, an indicator of social media participation such as tweets or posts, could suggest the number of individuals actively discussing a particular token.

Meanwhile, proponents of Pepecoin maintain a bullish outlook on the token’s potential performance in the upcoming years.

Before we delve deeper into the thick waters of memecoins, let’s do a quick market check. At the time of writing PEPE trades at $0.000001446 and boasts a market cap of $567 million. The green coin was launched in mid-April 2023 and is based on the Pepe the Frog meme, which has been associated with various trends and movements over the years. However, it’s worth noting that PEPE does not have an official connection with Matt Furie, the original creator of Pepe the Frog, or the original cartoon character.

Adding to its memecoin status, the circulating supply of PEPE tokens is 420 million, a reference to cannabis culture’s “4/20,” further emphasizing its meme-centric branding.

One of the key moments that contributed to the surge in PEPE’s popularity was a high-profile purchase that made waves within the cryptocurrency community on Twitter. An investor swapped 0.125 ETH (worth about $250) for a staggering 5.9 trillion PEPE tokens. As interest in PEPE grew, the value of these tokens increased dramatically, reaching approximately $1.8 million by April 19, 2023. This represented a potential return of around 4,500 times the initial investment, sparking interest among other investors hoping to secure PEPE tokens before the price peaked.

However, the future of PEPE remains uncertain. While meme coins are becoming an increasingly prominent part of the crypto trading landscape, PEPE may follow the trajectory of many other memecoins that have quickly faded from public view. The challenge for investors, including those holding large amounts of PEPE, will be to potentially profit from the token before the cryptocurrency community’s attention shifts elsewhere.

Lastly, it’s crucial to highlight that despite the dramatic increase in value for the early investor, the low liquidity of PEPE could make it difficult to sell large amounts of the token at the current price1. This is a critical aspect to consider when evaluating the token’s popularity and potential for future growth.

Other Meme Coins to Watch in 2023

Dogecoin

First established in 2013, Dogecoin was born out of an internet joke featuring the famous Shiba Inu dog meme. It stands out from Bitcoin, and many other cryptos, as it has an infinite supply potential. Dogecoin’s validation system uses a proof-of-work mechanism, in which miners utilize computational power to unravel intricate math problems, thus earning Dogecoin rewards in the process. Its claim to fame was catapulted in 2021 when high-profile personalities such as Elon Musk began endorsing it. Despite its fluctuating value, Dogecoin is commonly used for online gratuities and minor transactions, and can also be traded for other cryptocurrencies or fiat currency. Currently, DOGE is trading at $0.0705, with a total market worth of $10 billion.

Shiba Inu

Shiba Inu, also known as SHIB, was launched in August 2020 to rival Dogecoin directly. Unlike Dogecoin, Shiba Inu operates on the Ethereum blockchain and employs a proof-of-stake consensus algorithm, where validators are chosen based on the number of SHIB tokens they possess. The anonymous founder or group, “Ryoshi”, envisages a decentralized SHIB community where token exchanges and governance participation are the norms. Despite its value being notoriously unstable, it is primarily used for speculative trading and SHIB’s current price is $0.000008886, with a market cap nearing $5 billion.

Floki Inu

Floki Inu, a dog-themed meme coin, brands itself as “a movement”. It pays tribute to Elon Musk’s Shiba Inu dog and its community proudly identifies as the “Floki Vikings”. Floki Inu’s extensive ecosystem includes features such as “Valhalla”, an engaging metaverse game where users earn FLOKI tokens, and FlokiFi, its native DEX for staking, swapping, and yield farming. Just like other meme coins, Floki trades far below 1 cent at $0.00003574, boasting a market cap of $347 million.

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