A fresh memecoin surge has taken a significant step back after the market value of Pepe coin approached $2 billion in recent days. There is an argument to be made that the excitement is harmful to Bitcoin, which is already fragile due to trading below crucial levels.
Within the altcoin realm – tokens other than Bitcoin and Ether – there is a type of crypto known as memecoins, which are digital assets based mostly on online jokes, such as Dogecoin or Shiba Inu. Dogecoin, the eighth-largest digital asset by market value, is based on the “Doge” meme and was created as a joke rather than a real blockchain project.
Pepe, a token that evokes the Pepe the Frog meme – which has a funny cultural reputation – has caught traders by storm. The Anti-Defamation League (ADL) has designated the Pepe the Frog meme as a hate symbol, despite the fact that the mascot did not carry racial overtones at the time and that many users of the meme remain non-bigoted.
Pepe coin, which was launched last month, has skyrocketed since it was listed on the world’s sixth-largest cryptocurrency market OKX last week. According to data source CoinGecko, the market valuation of Pepe rose from $400 million last Wednesday to a high of $1.8 billion on Friday. The token’s trading volume has at times surpassed that of much larger peers like Dogecoin and Shiba Inu, indicating the excitement.
But the celebration is over, at least for the time being, which might be due to profit-taking by early investors, general dwindling interest in the token, or a risk-off move by traders amid widespread dips in cryptos – or any combination of the three. Pepe prices are down 14% in the last 24 hours, with significant drops over the weekend; its market valuation is currently around $800 million.
According to some market experts, the Pepe coin mania reflects a lack of seriousness among traders as well as damaging bubble characteristics that may give crypto a bad reputation – and may even be terrible for Bitcoin. The largest digital asset recently fell below a crucial technical mark, trading below $28,000 on Tuesday and farther away from the psychologically significant zone at $30,000.
“What is not helping Bitcoin is all the attention going to memecoin Pepe,” said Edward Moya, an analyst at broker Oanda. “The meme coin has collapsed, triggering massive losses for those who joined the party too late. For the global crypto market cap to make a serious run higher, these meme coins can’t be attracting this much attention.”