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Saturday, May 6, 2023

PEPE memecoin hit $1 Billion in just 3 weeks

Pepe (PEPE), a memecoin with a frog theme, has surged more than 85% in the last 24 hours, achieving a market cap of over $1 billion just three weeks after its launch on April 14, 2023. The irony of PEPE is that its core value proposition is that it has none. The official website of the cryptocurrency features a disclaimer that explains that investing in the token is entirely for entertainment purposes, with no intrinsic value or expectation of financial return. Presently, Pepe is following a similar path to other well-known memecoins like Dogecoin and Shiba Inu.

In 2021, Dogecoin's value increased by over 23,000%, mainly due to billionaire Elon Musk's vocal support for the token on Twitter. Similarly, Shiba Inu experienced a surge of over 1,250% during the 2021 crypto bull market after using Dogecoin as a springboard for its popularity.

Investing in memecoins is high risk due to the lack of underlying fundamentals, and these tokens are notorious for extreme volatility and significant swings in value. A closer look at some of the on-chain activity from Pepe insiders points to concerning trades. According to data from the blockchain analytics service Lookonchain, five addresses supposedly linked to the Pepe team made a profit of $1.23 million in a thin liquid market. They bought 8.87 trillion PEPE at a low price and sold over 90% of their holdings on Uniswap for a profit.

While it's worth noting that some of the top PEPE holders are centralized exchanges, non-exchange PEPE whales have recently reduced their positions, hinting at profit-taking that coincided with a price correction on May 3. Overall, the surge in the value of Pepe emphasizes the influence of social media on the cryptocurrency market and its potential impact on investors. However, the lack of underlying fundamentals of memecoins and their extreme volatility make them a high-risk investment.