Memecoin mania: Social relevance, hypothesis drives PEPE surge

Memecoins have been half and parcel of the cryptocurrency area because the inception of Dogecoin again in 2013, with fortunes made and ruined in equal measure. However a brand new token on the block brought on a stir in current weeks, as Pepe (PEPE) grabs a piece of the memecoin market share from plucky traders.

As beforehand reported by Cointelegraph, PEPE noticed a 2,000% growth in worth following its launch in late April 2023. The token’s rally is primarily attributed to zealous memecoin hype, with the challenge extensively shared on Twitter over the previous month.

The Pepecoin web site itself is brandished with a closing disclaimer, labeling $PEPE as “a meme coin with no intrinsic worth or expectation of monetary return.” The challenge additionally stipulates that it has no formal staff or roadmap and that the token is “fully ineffective and for leisure functions solely.

Knowledge analytics agency Nansen offered insightful information and key takeaways following the rise of PEPE’s market capitalization. Analysis analyst Xin Yi estimated that the overall memecoin market worth is round $20 billion, with the highest 5 tokens, DOGE, SHIB, PEPE, BABYDOGE and FLOKI, accounting for over $18 billion of the worth.

$PEPE’s token has spiked in worth since in launch, eclipsing the likes of $DOGE and $SHIB. Supply: Nansen Question

Knowledge offered from Nansen Question reveals the huge spike in token worth and market capitalization of PEPE in relation to the opposite high 5 memecoins. Yi additionally notes that the infographic doesn’t paint an entire image, on condition that the information for PEPE displays its itemizing on Coingecko, which got here a few weeks after its inception.

$PEPE’s token’s market capitalization surged by 400% since its inception. Supply: Nansen Question

Yi advised Cointelegraph that the social facet of memecoins stays a significant driver of investor sentiment and motion, highlighting the likes of Elon Musk’s notorious Dogecoin touts and rampant Twitter bots driving memecoin hashtags to relevance on Twitter:

“Since memecoins haven’t any intrinsic worth, it depends on catalysts resembling social relevance and likewise occasions like 4/20 which is called DOGE day can have an effect on the costs of the token as effectively.”

As beforehand explored, Nansen gives information analytics and insights into ‘good cash’ cryptocurrency merchants and holders by labeling wallets and monitoring trades. The rise of PEPE has additionally attracted a major variety of ‘good cash’ holders as per onchain information highlighted by Yi. She added that just a few thousand merchants would possibly profit from the surge in worth of memecoins, which is a big gamble on condition that many different memecoins are pump and dump or ‘rugpull’ operations:

“Nonetheless, positive factors on one good coin can simply surpass the price of the opposite ‘failed’ cash, which might be why these memecoins stay engaging for many merchants to ape into. Therefore, it actually relies on the investor’s danger urge for food.”

However, Yi additionally identified the inherent dangers of memecoins which frequently result in liquidity crunches, the place main token holders dump their holdings which leaves smaller traders reeling from losses.

Associated: Ethereum gasoline price jumped as a result of memecoin frenzy with combined feedback on community usability

Various cryptocurrency exchanges listed PEPE within the wake of its launch and subsequent investor attraction, together with the likes of OKX, MEXC World, Bitget, and Huobi. Pepecoin 

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