Over the last few weeks, we have seen an explosion of new memecoins that for some reason, excluded legacy ones. Pepecoin was at the forefront of the latest hype around memecoins. However, this also fuels a very pertinent question – Is this just the beginning or was its performance just a fluke?
Read Pepecoin Price Prediction for 2023-2024
We might need to dissect this crypto to understand its anatomy and that means first understanding the extent of Pepecoin’s performance. This memecoin has been around for less than 2 months, but somehow managed to attract heavy investment. It rallied by over 3000% from its lowest historic price to its highest price level on 5 May.
Pepecoin was worth less than $20 million in market capitalization in its early days. However, the massive hype around it attracted a lot of liquidity that pushed it to a market cap of almost $1.5 billion.
Source: Coinmarketcap
A market cap gain of more than $1 billion in less than 4 weeks is certainly an impressive feat for any type of cryptocurrency.
How and why did Pepecoin achieve this impressive milestone?
As noted earlier, memecoin season has been trending for the last few weeks. One of the key characteristics of the latest one is that investors are not interested in legacy memecoins like Dogecoin and Shiba Inu. Instead, traders are looking for opportunities that could attract a lot of hype and have a lot of upside potential.
Pepecoin fit the bill because it was previously non-existent on the blockchain, but it also had another major advantage. It was based on Pepe, the frog meme that has been around for years. Hence, it was well known. These characteristics made it a healthy candidate for the next big thing in the memecoin segment.
Is Pepecoin still worth buying?
Pepecoin’s marketcap has already been slashed by half from its latest ATH. This is a sign that the first wave of sell pressure has already taken place. Some might see this as an opportunity to buy it at a discount too. In fact, it had a $622 million market cap at the time of writing, and the outflows/sell pressure seem to have slowed down in the last few days.
The initial excitement around the coin may have also slowed down, but more people know about Pepecoin now more than ever. But, does this mean there is a lot of liquidity to be tapped into? Well, that may depend on a couple of factors. For example, will there be another wave of hype around this memecoin to attract new liquidity? Will Pepecoin demand prevail if the rest of the market starts recovering?
While we may not have all the answers or a crystal ball to consult about the future, we thought of consulting AI on the matter. We initially wanted to know whether ChatGPT could identify some of the reasons behind the latest Pepecoin rally and it did not disappoint. Here are its answers –
Source: ChatGPT
Elements of all the points highlighted by the AI were evident in Pepecoin’s recent rise to fame. However, the AI also gave a disclaimer that these memecoins are highly speculative and risky. Soon after, we pushed further and asked ChatGPT whether it thought Pepecoin might reach a $5 billion marketcap in the future. It is worth noting that the answer provided did not offer a concrete yes or no, but it did mention a risk of memecoins turning into pump and dump schemes.
Interestingly, some industry experts share a similar sentiment about memecoins being used as pump and dump schemes. Lark Davis, for instance, noted that Pepecoin does not have a special use case other than riding on the Pepe the frog meme hype.
Pepe coin explained ?#PEPEcoin #PEPE #memecoin pic.twitter.com/BXI05brV2U
— Lark Davis (@TheCryptoLark) May 21, 2023
Davis believes that such memecoins will eventually be worthless. Hence, the question – Is this the fate currently awaiting Pepecoin? Well, so far the top memecoins have been attempting to move towards gaining utility in order to survive after the initial hype. Also worth noting is that memecoins like Dogecoin and Shiba Inu have significantly higher market caps after going through a rough crypto-winter.
Some may see the fact that the aforementioned legacy memecoins have survived for so long as a sign that Pepecoin might have a bright future. However, those two have a lot more going for them, hence, they have retained investors that still believe in them.
Pepecoin may not be afforded the same luxury, especially if it fails to secure a special use case. Regardless, the future remains unwritten and there is still uncertainty as to whether Pepecoin demand will prevail going forward.
