Despite having no intrinsic value, memecoins have created many new millionaires among crypto investors.
A cryptocurrency trader has reportedly turned a $27 investment in the Pepe memecoin into an extraordinary $52 million profit, according to blockchain analytics firm Lookonchain.
An unknown Pepe (PEPE) trader bagged the life-changing profits, crypto intelligence firm Lookonchain revealed in a Dec. 14 X post.
Savvy Pepe trader transaction. Source: Lookonchain
The dog-themed token has surged to become the third-largest memecoin overall.
A Solana-based dog-themed memecoin called Bonk (BONK) has now become the third-largest memecoin by market capitalization, surging past that of fellow memecoin Pepe (PEPE) on Dec. 8.
Bonk’s recent price growth — 370% in the last month — has seen its market cap grow to $762 million, compared to Pepe’s current $675 million market cap, per CoinGecko data.
In the past 30 days, BONK has grown from $0.0000028 to $0.000012 as traders rushed to capitalize on a new wave of interest in the Solana ecosystem.
Some crypto market observers believe a rush into memecoin token PEPE could herald an impending Bitcoin dump, but not everyone is convinced.
Could Bitcoin (BTC) be headed for an imminent pullback? Some crypto market observers believe the answer could be hiding within the price action of a frog-themed memecoin.
In an Oct. 27 post on X (formerly Twitter), Onchain Capital co-founder and Crypto Banter host Ran Neuner suggested that memecoin Pepe (PEPE) is a strong indicator of overblown crypto market fever.
If you want to know when a pull back is coming, just watch $PEPE. It’s literally an index for when the market is getting overheated. When people are confident enough to go there and it pumps, that’s your sign to exit. Works every time. pic.twitter.com/vMcqiddHwp
— Ran Neuner (@cryptomanran) October 26, 2023
“If you want to know when a pull back is coming, just watch $PEPE. It’s literally an index for when the market is getting overheated,” said Neuner.
“When people are confident enough to go there and it pumps, that’s your sign to exit. Works every time.”
Pepe recently witnessed a more than 100% gain, growing from $0.00000064 on Oct. 20 to a peak of 0.00000134 on Oct. 27. Around the same time Pepe reached its peak, Bitcoin had already begun sliding downward from a just-attained year high.
Neuner’s theory has been shared by other crypto traders in the past. On Sept. 23, trader AlexRTB told his 60,000 followers that he had begun using Pepe as a reliable metric for impending short-term declines.
This $PEPE pump is another indicator of upcoming #BTC dump.
— Alex RT₿ (@rutradebtc) September 22, 2023
I am speaking with experience, you can check past price movements.
Pumping coins like $PEPE, $DOGE, $XRP, $IMX, $LINK always indicates the bloodbath, let's see how it goes this time. pic.twitter.com/piseCxRiqD
However, the theory also attracts a fair share of skeptics, while the data hasn’t always supported the theory.
Dubai-based trader Reetika told Cointelegraph that Pepe’s recent uptick was largely driven by bullish news regarding changes in the team and the fact that it would be burning additional tokens, and wasn’t necessarily a sign of broader overconfidence in the market.
6.9T $PEPE Tokens worth ~$6,000,000 have been burned. https://t.co/aN5LRUFz8u
— Pepe (@pepecoineth) October 24, 2023
A new team of advisors have been brought on to guide Pepe forward. Uses for the remaining 3.79T tokens attributed to the original team CEX multi-sig wallet for strategic partnerships and marketing… pic.twitter.com/JN3ssvH0XL
As comparative data from TradingView shows, the price of Pepe is often tightly correlated with that of Bitcoin, which could make it challenging to use the memecoin as an indicator.
Reetika, meanwhile, suggested looking at Solana (SOL) as a potentially more reliable predictor.
“SOL has been a very good leading indicator for the moves so far. It has broken out of resistances at least a day before BTC/ETH over this entire move. I've been using it actionably for estimating upside,” she said.
Reetika however clarified that the SOL isn’t a perfect indicator either, but had performed well on the most recent move.
Similarly, market commentator and avid crypto shitposter Poordart, told Cointelegraph that Pepe probably isn’t the best metric from which to gauge the future price action of majors like Bitcoin.
In Poordarts’ view, Pepe is still far too new to the market to have any “real lasting value” as a reliable metric to gauge the price movements of Bitcoin with any significant accuracy.
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Cointelegraph also spoke to developers purportedly behind a new PEPE token spin-off, who claim the new one is everything "the old Pepe token should have been."
The biggest new memecoin of 2023, Pepe (PEPE) suffered one of the worst possible fates that can befall a new crypto asset; a partial rug pull — after its anonymous developers abruptly sold nearly $16 million worth of the token on Aug. 24.
The official Pepe X (formerly known as Twitter) account explained the drop was due to “three ex-team members” going behind their back and selling the tokens without their knowledge — a move that saw the price of Pepe plummet as much as 26% in the days following, without much respite.
an announcement to the $PEPE community:
— Pepe (@pepecoineth) August 26, 2023
Yesterday on August 24th, 2023, a series of unexpected transactions took place from the $PEPE multisig CEX
Wallet in which ~16 Trillion $PEPE tokens (worth roughly $15m USD) were transferred to various crypto exchanges (OKX, Binance,… pic.twitter.com/iZmXV1TAvw
In the wake, crypto investors and memecoin enthusiasts are still scratching their heads — pondering if the frog-themed token could ever hope to return to pre-rug prices.
Speaking to Cointelegraph, crypto trader Reetika Trades saw some potential positivity for PEPE, despite admitting the manner in which the devs sold wasn’t ideal. She believes that the event will ultimately have “negligible effects” on the token’s outlook in the long run.
“It’s a memecoin with no promise of utility, so some devs leaving makes no difference to the token,” she said.
“By selling a lot of the coins now, the threat of the total number of potential coins the devs could dump on people has reduced in the future — which is healthier in the long run.”
However, Reetika also pointed out that Pepe is a memecoin that has made its name by being forward that it is fundamentally worthless and has no underlying value upon which to price it. As a result, the price of memecoins are prone to extreme volatility, and any investment in these assets should be treated as more akin to gambling.
Similarly, pseudonymous trader Horse said that getting the remaining supply of the tokens out of the hands of the developers who sold was a beneficial move long term, especially if it’s “attempting to become similar” to Dogecoin (DOGE).
“I think it will make a comeback.”
These sentiments were echoed in a report from crypto data provider Kaiko, which noted that despite the sudden crash in price, the liquidity of the memecoin held up surprisingly well.
“It seems that the team’s potential abandonment of the project is not yet the death sentence that some have proclaimed,” Kaiko researchers concluded.
However, not everyone agrees that the future is distinctly bright for Pepe.
Analysts from Santiment warned that traders should expect “higher volatility” despite Pepe becoming the top trending cryptocurrency in the wake of the rug pull allegations.
If you are riding the wave of #memecoins during these uncertain market conditions, #Pepecoin has quickly become the top trending #crypto topic this weekend. Former team members are accused of removing $16M. Expect even more high volatility than usual. https://t.co/iQLD7h224s pic.twitter.com/UOR4sTcWwv
— Santiment (@santimentfeed) August 27, 2023
Offering possible the most bearish take on Pepe was prominent trader Kaleo, who said he hoped that the memecoin “completely collapses.”
This may be a controversial take, but at this point I hope $PEPE completely collapses. While I understand a community has developed outside of the founders - the fact remains, as long as the coin survives and does well - the founders continue to do well with it.
— K A L E O (@CryptoKaleo) August 26, 2023
And they don’t…
Even following the announcement of the new direction from the Pepe team, Kaleo said he would remain on the sidelines. However, he admitted that Pepe would probably “rally to new highs from here just to spite me because I decided to take a perceived moral high ground and sideline myself.”
Related: PEPE price to zero? Pepecoin rug pull allegations put memecoin at risk
Meanwhile, in the wake of the turmoil with Pepe, one anonymous team has ventured to create yet another spin-off of the original Pepe token, one that they claim is free from the issues that came along with its predecessor.
Speaking to Cointelegraph, the team behind the project described the new PEPE token as the “true essence” of decentralized finance (DeFi).
“The new Pepe token is essentially what the old Pepe token should have been; decentralized, community driven, no team tokens and deflationary,” they said.
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The price of Pepe has plummeted 15% after developers sent nearly 4% of the memecoin’s total supply to exchanges without warning.
The price of the frog-themed memecoin Pepe (PEPE) has plunged nearly 15% after recent changes to a multisig wallet and new token transfers ignited fears of a “rug pull” by its developers.
The allegations — as well as the negative price action — came as $16 million worth of Pepe tokens were sent from the developers’ multisig wallet to various crypto exchanges on Aug. 24.
1/4
— ASXN (@asxn_r) August 24, 2023
1 hour ago, the Pepe multisig wallet, changed the amount of signatures required on their multisig from a 5/8 to 2/8. This comes after sending $15.7 million worth of $PEPE to exchanges.
A breakdown of what we know: pic.twitter.com/bxBxp6Nzqz
According to data from blockchain custody app Safe Global, the wallet address transferred 16 trillion Pepe tokens — approximately 3.8% of the total supply — to three exchanges and an unverified wallet address.
Data shows $8.2 million worth of Pepe was sent to OKX, $6.5 million to Binance and $434,000 to Bybit, while an additional $400,000 was transferred to an unknown wallet.
Following the transfer of the 16 trillion Pepe tokens to exchanges, the developers made a curious change to the team’s multisig wallet, which at the time of publication still contains $10 million worth of Pepe.
Data from Etherscan shows that the wallet now only requires two out of eight signatures — formerly five out eight — to sign off on whether or not the wallet should make transfers.
Notably, the transfer of funds marked the first time that Pepe tokens had ever been sent from the project's multisig wallet to exchanges.
Related: Is the 25% drop in PEPE, SHIB and APE a sign of a deepening crypto bear market?
Many memecoin investors heralded Pepe as the next major memecoin, with some suggesting that — come the next bull run — the frog-themed meme token was capable of “flipping” the original memecoin, Dogecoin (DOGE).
The movements of funds out of the multisig could throw this thesis, for some, into question.
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