Welcome back to the distributed ledger. This is Francis Yu, MarketWatch’s crypto reporter. Crypto investors have recently witnessed the meteoric rise of other meme coins. Three weeks after its launch, Pepe Coin, a token in reference to the internet meme Pepe the Frog, saw its market capitalization rise as high as $1.6 billion on May 5, though it has fallen 60% to around $600 million. The token has lost more than 70% of its value from its all-time high on May 5.
Also Read: Why Meme Coins Are Trending Again Pepe’s rally reminded investors of the meme coin craze in 2021, especially as evidenced by the rise of Dogecoin and Shiba Inu at that time. Pepe’s surge also inspired a buying frenzy for several other meme coins, which simultaneously contributed to congestion on the Ethereum and Bitcoin networks. Lately, crypto enthusiasts have been monitoring tensions between the Pepe Coin community and digital asset exchange Coinbase COIN, -3.66% , which said in a newsletter Wednesday that the Pepe the Frog character has been co-opted as a symbol of hate by “alt- Right-wing groups,” citing the Anti-Defamation League. It has since sparked an outcry from supporters of meme tokens on Twitter. “Pepe the Frog is many things, but he’s definitely not an alt-right hate symbol,” wrote Twitter user @farokh, Pepe. Supporter of the coin. “Whether the story was taken from Matt Fury [creator of the character] For a moment? Yes, it was. Does that mean the entire character is racist and condones hateful speech and behavior? No, it’s not.” On Thursday, Paul Grewal, Coinbase’s chief legal officer, tweeted an apology to the Pep Coin community, saying that the exchange’s newsletter does not provide a complete picture of the meme’s history. Share any thoughts on crypto, this newsletter, or your personal stories with digital assets. Find me on Twitter at @FrancesYue_ to do so.The rise of the Pepe coin Chase Devens, a senior research analyst at Messari, attributed Pepe’s rise to a “perfect storm of conditions.” “I would say that in the past month, nothing really significant has happened in crypto,” Devens said in a phone interview. “So when the Pepe coin popped up, it was relatively easy for people to be like, this is something interesting and start drawing attention to it.” It also contributed to crypto’s rally that the Pepe the Frog meme was already popular on the Internet, Devens noted. Jeff Mei, chief operating officer of BTSE, said that Pepecoin’s rise was largely driven by investors’ fear of missing out, often referred to in crypto slang known as “FOMO.” The support of so-called whales, or individuals or organizations that hold large amounts of Pepe coin, is also helping the rally, Mei said. “While the crypto market as a whole may be stuck in an extended winter, viral dynamics follow their own logic,” Mei said. Bitcoin is up more than 60% so far this year, but is still below its all-time high in 2021, according to CoinDesk data. what’s next Pepe Coin’s price peaked at around $0.000004 on May 5, after Binance said it would list the token, but has since fallen more than 70% to around $0.000001 on Thursday. Devens noted that it’s relatively common for memecoin prices to rise as they are listed on major exchanges and then fall. For example, after Coinbase listed the coin in September 2021, Shiba Inu’s price peaked at around $0.000018 in October 2021, but then halved to around $0.0000086 on Thursday. It’s hard to say what’s next for Pepe Coin, Devens noted. Compared to Dogecoin and Shiba Inu, which have market capitalizations of $9.8 billion and $5.1 billion, Pepe Coin is still relatively small. To be sure, cryptocurrencies, especially meme coins, are extremely volatile and remain largely unregulated. Congestion on Ethereum and Bitcoin The rise of the Ethereum-based Paye coin has also led to an increase in gas fees, or fees paid to validators on the blockchain, as more transactions take place on the network. The resurgence of the meme coin inspired by Pepe has led to more tokens being created on the Bitcoin network using the BRC-20 token standard, which allows users to create and send fungible tokens via the Ordinals protocol. “Since the launch of PEPE, the BRC-20 meme coin has exploded in popularity and generated huge congestion on the network,” Devens wrote in a recent note. Read: Binance twice pauses bitcoin withdrawals due to ‘huge volume’ The crypto plunged 6.3% in an instant and was trading below $27,000 on Thursday, according to CoinDesk data. Ether fell 4.5% to below $1,800 over the same period.
Bitgate Token $0.48 20.4% Kava $0.86 8.1% Bitcoin SV $33.72 2.2% LEO Token $3.60 1.1% cUSDC $0.02 0.3% Source: CoinGecko
The largest decliners
Render $1.7 -26.8% Optimism $1.51 -26.3% Conflux $0.25 -23.9% Injective $5.70 -23.7% Frax Share $5.95 -22.3% Source: CoinGecko Must-Read