Pepe Pops 7,000% in Cryptoverse: a Day for Every Frog
The rise of Pepe, a new memecoin inspired by an anthropomorphized frog popular in internet memes, has sparked renewed investor interest in the hyper-speculative, ultra-volatile and somewhat peculiar class of crypto as a whole. Pepe leapt nearly 7,000% in the 17 days following its April 16 launch, hitting a market value of $1.8 billion by May 5, according to data tracker CoinGecko. Its rise led to a jump in overall trading volumes in memecoins to $2.6 billion in the first week of May from $408,000 the week before, data from Dune Analytics shows. The current memecoin frenzy comes as bitcoin’s 2023 rally stalls. Pepe trades for fractions of a cent and was down 60% from its May 5 peak on Monday, though still boasting a market cap of almost $740 million. Pepe’s website says it was launched “for the people” with “no formal team or road map” and is “completely useless and for entertainment purposes only”. The coin is the fastest-growing cryptocurrency hosted on Ethereum, the second-largest blockchain, data firm Messari said. The centralized listings also opened the door for derivative trading for Pepe, with leveraged exposures and volatility pushing Ethereum transaction fees higher, according to Chase Devens, analyst at Messari. As with other crypto tokens, the fortunes of memecoins are rooted in retail trading and often fueled by online sentiment. Market players warned that traders and investors could get badly burned by memecoins. Martin Leinweber, product strategist at MarketVector Indexes said, “I would still be very cautious to buy them. It’s gambling in its purest form.”
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