PEPE's surge is driven by memecoin mania, fueled by social relevance and speculation.
The market capitalization of speculative tokens has surpassed $20 billion, with PEPE's recent boom putting memecoins back in the headlines.
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Memecoins have been part and parcel of the cryptocurrency space since the inception of Dogecoin back in 2013, with fortunes made and ruined in equal measure. But a new token on the block caused a stir in recent weeks, as Pepe (PEPE) grabs a chunk of the memecoin market share from plucky investors.
As previously reported by Cointelegraph, PEPE saw a 2,000% boom in value following its launch in late April 2023. The token’s rally is primarily attributed to zealous memecoin hype, with the project widely shared on Twitter over the past month.
The Pepe website includes a disclaimer stating that the token is a meme coin with no intrinsic value or expectation of financial returns, and is entirely useless and intended for entertainment purposes only. Additionally, the project has no official team or roadmap.
Following PEPE's market capitalization increase, data analytics firm Nansen shared valuable data and insights.
Research analyst Xin Yi estimated that the total memecoin market value is approximately $20 billion, with the top five tokens including Dogecoin (DOGE), PEPE, Baby Doge Coin (BABYDOGE), and Floki (FLOKI) accounting for over $18 billion of the total value.
Nansen Query data illustrates the significant surge in PEPE's token value and market capitalization compared to the other top five memecoins. However, Yi cautions that the infographic doesn't provide a complete picture as the data for PEPE reflects its listing on CoinGecko, which took place a few weeks after its launch.
According to Yi, the social aspect of memecoins remains a crucial factor driving investor sentiment and behavior. He cited examples such as Elon Musk's well-known promotion of Dogecoin and the widespread use of Twitter bots to boost memecoin hashtags, increasing their relevance on the social media platform.
“Since memecoins have no intrinsic value, it relies on catalysts such as social relevance and also events like 4/20, which is known as DOGE day, can affect the prices of the token as well.”
As previously mentioned, Nansen utilizes data analytics to track trades and label wallets of "smart money" cryptocurrency traders and holders. According to Yi, the surge in PEPE's value has attracted a significant number of these traders, with on-chain data indicating that a few thousand may be benefiting from the memecoin's rise. However, Yi cautions that investing in memecoins is risky as many of them are pump-and-dump or rug-pull schemes.
“Nonetheless, gains on one good coin can easily surpass the cost of the other ‘failed’ coins, which is probably why these memecoins remain attractive for most traders to ape into. Hence, it really depends on the investor’s risk appetite.”
Despite the potential gains of investing in memecoins, Yi highlighted the risks that come with them, such as liquidity crunches. These occur when significant token holders sell off their holdings, leaving smaller investors with significant losses.
A number of cryptocurrency exchanges listed PEPE in the wake of its launch and subsequent investor appeal, including the likes of Binance, OKX, MEXC Global, Bitget, Gate.io and Huobi.
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