The cryptocurrency market’s Memecoin craze is showing signs of decline as popular meme tokens, including PEPE Coin, experience a significant drop in prices. While Bitcoin users may welcome this development, investors may not be as pleased, given the ongoing market correction.
PEPE, the frog-themed Memecoin that gained a lot of attention, has lost 60% of its value since reaching its all-time high of $0.00000431 on May 5th. Its current price stands at $0.00000172, and its market value has dropped from a peak of $1.6 billion to around $720 million.
Although the broader crypto market has experienced a 1.7% gain, PEPE’s value has dropped by 4.5% in a single day, indicating that the fever for Memecoins has cooled down, at least temporarily. However, the cryptocurrency market’s unpredictability makes it uncertain whether this trend will continue.
Investors should conduct thorough research before investing in any cryptocurrency, given the risks involved. Digital asset manager Arca’s trader, Kyle Doane, has referred to the trading of Memecoins as “a centralized casino” and likened it to buying a lottery ticket.
The Memecoin frenzy could indicate a local market top, which in the past has resulted in multi-month drawdowns for Bitcoin and other cryptocurrencies. A similar scenario was observed in May 2021 when Dogecoin led the Memecoin boom.
Joe Rotunda, director of the Texas State Securities Board enforcement division, warns that when the buzz disappears and the hype dissipates, the value tends to plummet, and investors can suffer significant losses. Cashing out of meme-coins can also be problematic due to liquidity issues. However, PEPE still has around $360 million in daily trading volume.
The meme coin-minting frenzy is subsiding, providing some respite to the Bitcoin network. The mempool’s number of pending unconfirmed transactions has dropped to 242,837, and transaction fees have stabilized.