Introduction
Meme coins have taken the crypto market by storm. Rising to fame by the hype created by memes and social media trolls, these coins have seen explosive growth both in terms of market cap and price surges. The term Meme or shitcoin is used interchangeably, however, both these terms describe coins that have no real-world use or underlying technology and rely solely on hype and speculation. You might find a common theme among the meme coins that they are often inspired by an internet meme.
Pepe (PEPE), a meme coin inspired by the iconic internet meme Pepe the Frog, was released in April last year and has constantly been in the news. The coin has attracted a significant audience including some whales; however, would this coin be able to follow suit with other meme coins? Let’s find that out!
A Brief History
Meme coins were introduced in the market for the very first time in 2013 when Dogecoin (DOGE) hit the market. Based on the Doge Meme, featuring a Shiba Inu dog as its token symbol, the coin immediately skyrocketed both in value and fame. Although everyone knew at the time that the coin did not hold any inherent value, endorsements from celebrities and famous individuals like Elon Musk helped Doge get recognition in the market.
The history of Pepe is a bit more complicated than that of Doge and similar Memecoins like Shiba Inu. Pepe the Frog, featured in the comic series “Boy’s Club” by Matt Furie became a meme icon in the early 2010s. However, some events distorted its overall image and later a negative connotation was attached to it which eventually led to its disappearance from the internet. Thus, the release of Pepe Coin (PEPE) was an effort towards the revival of the humorous and comical side of Pepe the Frog.
Financials
Launched on the Ethereum chain, Pepe coin follows a deflationary model, which ensures that the overall supply of the coin decreases over time. The coin has recently hit a big milestone by surpassing established coins like Polygon by reaching a market cap of $6.8 billion. To put this into perspective, the coin is worth more than all the NFTs projects, on all the blockchains combined!
Since its launch back in April 2023, the coin’s price has seen a massive growth of over 25750%. This is huge considering that it operates in a very volatile market and holds no technological or world use case. An even more interesting fact is that the coin’s value surged over 128% in the past month alone.
Some savvy investors who rallied funds into the coin state that they have made around $4.95 million in profit which is a 52% return on their initial investment. This shows how a savvy move could help you earn big from these volatile coins even in situations when the token has experienced a 17% depreciation compared to its all-time high price.
Today, Pepe has officially surpassed other meme coins by hitting a 900% growth rate on a year-to-date (YTD) basis and data suggests that 96% of Pepe holders are in profit. Which is massive considering the volatile market Cryptocurrencies operate in.
Investment in Meme Coins
There is no one concrete advice on whether one should invest in meme coins or not. On the one hand, the exponentially spiking price charts paint a very lucrative picture. However, on the other hand there is always a looming fear of uncertainty caused by the extreme volatility of the market.
As mentioned earlier, meme coins gain their value from market sentiment and the hype created by the community but hold no intrinsic value. This characteristic has played a huge role in their success so far, but at the same time, one cannot depend on an asset that attains its value solely from social media.
Unlike established cryptocurrencies such as Ethereum (ETH) which powers decentralized ecosystems, meme coins have no real-world utility. This means if the hype dies, or the interest of the community wanes, the coin could hypothetically lose all its value.
So, the answer to the question of whether one should invest in a meme coin or not is rather complex. There is no doubt about the gains one could achieve, but you need to be cautious when dealing with uncertain currencies. There are a few checks that you should make before investing:
- Only invest the amount you can afford to lose.
- Meme coins are very volatile, and you cannot confidently predict gains or losses, so, be prepared beforehand.
- Do your complete research about the general perception of the market and understand the inherent risks that come with investing in meme coins.
- Do not chase trends blindly or invest based solely on hype. Social media can be a breeding ground for misinformation.
Investing in Pepe Coin (PEPE)
Coming back to our discussion at hand, PEPE trades in an inherently volatile market and the presence of pseudo-named analysts makes it even harder to predict the future. There is no doubt that the coin is among the hottest assets on the market and the rising interest in the currency is evident from the huge trading volumes that reached $2.5 billion in the past 24 hours. Not only that but the recent bullish runs of the coin have helped 96% of its holders make massive profits.
Currently, the sentiment regarding PEPE is that it is about to enter its correction cycle where we might expect a further depreciation in its price. However, a crypto analyst using the pseudonymous Davie Satoshi wrote, “Typically, wave 4 tends to be a triangle pattern and corrects about 23-30%…This might be the pattern we are seeing until a major launch for wave 5 which should take us to $10b and higher!” If we take this analyst seriously, the PEPE coin has the potential to hit a market cap of $10 billion which means many savvy traders would end up becoming millionaires off a meme coin.
Conclusion
PEPE has not been very unique when it comes to the market and overall trend of meme coins. Boosted by hype from social media and young communities, its journey reflects the volatility of the digital asset as it heavily relies on public sentiment instead of tangible utility.
PEPE has enjoyed staggering growth and significant profitability for its holders; however, this is not a testament to taking a careless approach and investing all your money in it. The lure of quick gains must be balanced by taking caution and making a pragmatic assessment of your risk tolerance and financial capabilities. Invest only when you can afford to lose the principal amount you plan to invest, and that too after conducting thorough research.
Finally, the crypto market is going through a correction after the bitcoin halving, and we are expecting that PEPE will also face some price correction moving forward. So, if you plan to invest in this meme coin, stay vigilant. A clear-eyed evaluation of the underlying dynamics is the only way to make huge bucks off these meme coins.
Article By: Hamza Bashir. An avid investor and strategic consultant with expertise in stock analysis. He has been investing, analyzing, and writing articles on the stock, cryptocurrency, real-estate, and commodities market for over 3 years.