Techspace - Pepe, a coin inspired by a popular anthropomorphic word in internet memes, jumped nearly 7,000% in the 17 days after its launch on April 16, reaching a market value of $1.8 billion on Friday, May 5, according to data tracker CoinGecko.
Pepe's rise has sparked renewed investor interest in meme-coin as a whole, with overall trading volume surging to $2.6 billion in the first week of May from $408,000 in the previous week, data from Dune Analytics shows.
Todd Groth, head of index research at CoinDesk Indices said "Meme-coin does flare up sometimes, and that has historically been when the market was a bit choppy or sideways."
"It's almost like if the market isn't moving fast enough, traders find these smaller tokens to trade with."
Indeed, the latest meme-coin frenzy came as the 2023 bitcoin rally stalled. The No.1 cryptocurrency has fallen 6% since mid-April to $27,416.
Pepe, which is selling for a fraction of a cent, is down 60% from its May 5 peak, although it still boasts a market cap of nearly $740 million. This makes it the third largest meme-coin after dogecoin and Shiba Inu, both born as internet jokes referring to Japanese dog breeds, which control the more than $10 billion and $5 billion market respectively.
Meme-coin first exploded into public view during the 2021 “Wall Street Bets” movement, fueled by retail traders. They have no practical use outside of circuits, distinguishing them from other "mainstream" coins such as bitcoin and ether which proponents say have potential as a means of payment or a store of value.
Market participants change that traders and investors can be burned to the ground by meme-coin.
Martin Leinweber, product strategist at MarketVector Indexes argues that humans love to speculate, "I would still be very cautious about buying. It's gambling in its purest form."
Since launching in April, the token associated with Pepe the frog has shot up the coin meme list in terms of market value. It also jumps to the top of the list in terms of daily trading volume.
Pepe's website said it was launched "for the people" without a "formal team or roadmap" and was "totally useless and for entertainment purposes only".
The coin is the fastest growing cryptocurrency hosted on Ethereum, the second largest blockchain, data firm Messari said.
Pepe's surge in popularity is reinforced by his quick listing on top exchanges, including top platform Binance, said Chase Devens, an analyst at Messari.
Binance says on its website that Pepe has "no utility" or "value support mechanism". It has users about Pepe's volatility and says the platform "will not be held responsible for your trading losses." Binance did not immediately respond to a request for comment about Pepe's spike.
The aforementioned listing also opens the door to derivatives trading for Pepe, with exposure to leverage and volatility pushing Ethereum transaction costs higher, Devens said.
The popular cartoon Pepe the frog that inspired the coin has been used for years in various internet memes. The Anti-Defamation League said it had in some cases been used by the alt-right for racist imagery.
Like other crypto tokens, meme-coin's wealth is cleared at retail trading and is often driven by online sentiment.
Dogecoin and Shiba Inu, the eighth and 15th largest cryptocurrencies respectively, experience wild price swings frequently.
Dogecoin was launched in 2013 and jumped more than 12,000% to an all-time high in May 2021, before sinking nearly 90% since then. Shiba Inu are also down 90% from their peak in October 2021. Read more
Pepe is a newcomer who already has more than 100,000 holders according to CoinGecko data.
Edmond Goh, head of trading at crypto liquidity provider B2C2 said the convenience of meme-coin is an interesting phenomenon. "The recent coin boom illustrates that there is still capital waiting to be mobilized."