Memecoin mania appears to be waning as the prices of popular coins like PEPE experience a decline. While this may be good news for Bitcoin enthusiasts, it may not bode well for investors as the crypto markets continue to correct.
The recent frenzy surrounding memecoin minting, which caused congestion on the Bitcoin network last week, seems to have subsided. In particular, the frog-themed PEPE memecoin, which had garnered significant attention, has plummeted by 60% since reaching its peak earlier this month.
PEPE swiftly rose from obscurity to an unprecedented high of $0.00000431 on May 5. However, it has since experienced a sharp decline, currently resting at $0.00000172.
On the day, the memecoin has dropped by 4.5%, while the overall market has seen a 1.7% gain. This indicates that the fever surrounding memecoins has temporarily subsided.
The coin’s market capitalization reached a pinnacle of $1.6 billion before receding to its current level of approximately $720 million.
Memecoin Hype Fizzles Out as BTC and ETH Experience Setbacks
According to a report from Bloomberg, speculators who took on the high-risk memecoins are now selling off portions of their BTC and ETH holdings. This recent trend has led to a pullback in the top two cryptocurrencies, which had been experiencing gains for several months.
Kyle Doane, a trader at digital-asset manager Arca, shared his perspective on PEPE, stating, “Ultimately, it’s like playing the lottery,” and further emphasizing that such trading resembles a centralized casino.
The surge in memecoin popularity could potentially indicate a local market peak, often followed by extended periods of decline for Bitcoin and other cryptocurrencies. A similar scenario unfolded in May 2021 when Dogecoin (DOGE) spearheaded the memecoin boom.
Joe Rotunda, the director of the enforcement division at the Texas State Securities Board, cautioned, “Once the buzz fades away and the hype diminishes, the value tends to plummet, resulting in significant losses for investors.”
Selling off memecoins can also present challenges due to liquidity concerns. Nonetheless, PEPE still maintains a daily trading volume of approximately $360 million.
Crypto community
LunarCrush data reveals a significant surge in social engagement, indicating a vibrant community actively participating in various social media interactions. This engagement is quantified through metrics such as likes, retweets, comments, bookmarks, and influential account involvement, among others.
The frenzy surrounding “Pepe” reached its peak on May 13 when Elon Musk, the CEO of Tesla, indirectly referenced Pepe in a tweet. Musk cleverly utilized the Pepe frog character to explain constitutional amendments in a meme post. In response, the official Pepe Coin account swiftly replied with the phrase, “Seize the memes of production,” cleverly alluding to the popular saying, “seize the means of production.” This tweet unexpectedly boosted the price of PEPE coin.
However, at the time of writing, PEPE has relinquished its intraday gains and has experienced an 8.09% decline in the last 24 hours, now priced at $0.000001791. On a weekly basis, PEPE remains down by 35.10%. Adding to the surge in social engagement is the Gemini 1 billion PEPE giveaway campaign.
Crypto exchange Gemini recently announced the giveaway of 1 billion Pepe tokens to one fortunate winner, commemorating the listing of PEPE on their platform. To qualify for the giveaway, participants were required to retweet Gemini’s PEPE post. This campaign has further amplified the excitement surrounding the token. Notably, the PEPE token has faced controversy, with Coinbase noting that the original Pepe the Frog meme had been “appropriated as a hate symbol by alt-right groups.”
However, Coinbase’s top legal officer issued an apology to the Pepe community last week, recognizing the token’s legitimate usage and its positive impact on the community.
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