The Meme Crypto Craze Continues: Pepe Coin's Rise and Fall

The world of cryptocurrency has recently seen the rise of another meme coin, Pepe coin, which has captivated investors with its meteoric rise in market capitalization. Launched just three weeks ago, Pepe coin saw its market cap skyrocket to $1.6 billion on May 5th, although it has since fallen by over 60% to approximately $600 million. The token has lost more than 70% of its value from its all-time high, reminding investors of the meme coin craze that they witnessed in 2021 with the rise of dogecoin and Shiba Inu.

Pepe's surge has also led to a buying frenzy of several other meme coins, contributing to the congestion of the Ethereum and Bitcoin networks. Crypto enthusiasts are currently watching the tension between the Pepe coin community and digital asset exchange Coinbase, which claimed that the Pepe the Frog character has been "co-opted as a hate symbol by alt-right groups." This sparked outrage from the meme tokens' supporters on Twitter, who argue that the character is not a hate symbol.

Pepe's rise is attributed to a "perfect storm of conditions" by Chase Devens, senior research analyst at Messari. Devens noted that in the past month or so, nothing too noteworthy has happened in the crypto world. Therefore, when Pepe coin popped up, it was easy for people to direct their attention towards it. The fact that the Pepe the Frog meme was already popular on the Internet also contributed to the crypto's rally.

According to Jeff Mei, chief operating officer at BTSE, the rise of PepeCoin was largely driven by investors' fear of missing out, a phenomenon known in crypto slang as "FOMO." The support of so-called whales, or individuals or entities that hold large amounts of Pepe coin, also helped with the rally.

Pepe coin's price peaked on May 5th at around $0.000004 after Binance announced that it would list the token, but it has since fallen by more than 70% to about $0.000001. It is relatively common for meme coin prices to spike when listed on major exchanges and then fall afterward. For example, Shiba Inu's price peaked in October 2021 at around $0.000018 after Coinbase listed the coin in September 2021, but has since lost half of its value.

It is hard to predict what is next for Pepe coin, given that it is relatively small compared to other meme coins such as Dogecoin and Shiba Inu, whose market capitalization stands at $9.8 billion and $5.1 billion, respectively. Cryptocurrencies, especially meme coins, are highly volatile and remain largely unregulated.

The rise of Pepe coin, which is based on Ethereum, has also led to an increase in gas fees, or the fees paid to validators on the blockchain, as more transactions are happening on the network. The meme coin resurgence inspired by Pepe has also 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 through the Ordinals protocol. "Since the launch of PEPE, BRC-20 meme coins have exploded in popularity and caused heavy congestion on the network," wrote Devens in a recent note.