Since its launch on April 14, the price of the new memecoin with a frog theme has surged by more than 4,000%. In just three weeks, Pepe (PEPE), the frog-themed memecoin, has surpassed a $1 billion market cap after surging over 85% in the past 24 hours.
Ironically, the main selling point of PEPE is that there isn't one. The official website of the cryptocurrency includes a disclaimer that describes investing in the token as high-risk.
PEPE memecoin price breaks $0.000003 on May 5. Source: CoinGecko
Currently, Pepe seems to be following a similar path to its more popular memecoin counterparts, Dogecoin (DOGE) and Shiba Inu (SHIB), which surged by over 23,000% and 1,250%, respectively, during the 2021 crypto bull market.
However, due to the lack of underlying fundamentals, investing in memecoins is considered high risk, and they are known for their extreme volatility and significant fluctuations in value. A closer look at some of the on-chain activity from Pepe insiders suggests concerning trades.
According to data from the blockchain analytics service Lookonchain, five addresses allegedly linked to the Pepe team made a $1.23 million profit by buying 8.87 trillion PEPE at a low price and selling over 90% of their holdings on Uniswap for a gain.
PEPE buying and selling schematic. Source: Lookonchain
While some of the top PEPE holders are centralized exchanges, non-exchange PEPE whales have reduced positions recently, suggesting profit-taking that coincided with a price correction on May 3.
This highlights the risky nature of investing in memecoins, where their value is mostly based on speculation and hype. It is crucial to do thorough research and exercise caution when investing in these types of cryptocurrencies.
Moreover, the rise of memecoins has also drawn criticism from some experts who view them as a bubble waiting to burst. The lack of any underlying value proposition and the potential for market manipulation make memecoins a speculative investment that is not suitable for everyone.
As with any investment, it is essential to assess your risk tolerance and make informed decisions based on your financial goals and circumstances. While the allure of quick gains can be tempting, it is crucial to remember that investing in memecoins, like any other investment, comes with risks.
In summary, the surge in the value of the frog-themed memecoin Pepe is another reminder of the unpredictable and volatile nature of the cryptocurrency market. While it may seem like a quick and easy way to make money, investing in memecoins is a high-risk endeavor that requires careful consideration and risk management.
