Dogecoin competitor Pepe falls after value close to $2 billion. It’s bad for Bitcoin.
A rally in a new memecoin has taken a big step back after the market cap of the token Pepe approached $2 billion in recent days. There is a case to be made that the frenzy is bad for Bitcoin, which is already vulnerable as it trades below key levels.
Within the altcoin space – tokens that are not heavyweights,
Bitcoin
and
Ether
— There is a category of crypto known as memecoins, which are digital assets that
Dogecoin
or
Shiba Inu
mainly based on internet jokes. Dogecoin, which is the eighth largest digital asset by market capitalization, refers to the “doge” meme and was founded more as a joke than a serious blockchain project.
A new name for the block has taken traders by storm: Pepe, a symbol that references the Pepe the Frog meme – which has a checkered cultural reputation. The Anti-Defamation League (ADL) has called the Pepe the Frog meme a symbol of hate, while noting that the character initially had no racist connotations and that many uses of the meme remain unsavory.
Launched last month, Pepe has exploded since its listing on the OKX crypto exchange – the world’s sixth largest – last week. Pepe prices soared higher with its market cap rising from $400 million last Wednesday to a peak of $1.8 billion on Friday, according to data provider CoinGecko. The token’s trading volume – a sign of the frenzy – has at times dwarfed its much larger peers such as Dogecoin and Shiba Inu.
But the party is over, at least for now, which could indicate profit-taking by early investors, general waning interest in the token, or a risk-off move by traders amid broader falls across crypto- or a combination of all wood. Pepe prices are down 14% in the last 24 hours, with deep falls over the weekend; the market value is now heading towards 800 million dollars.
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For some market observers, the frenzy over Pepe represents a lack of seriousness among traders and harmful bubble dynamics that could give crypto a bad name — and it could even be bad for Bitcoin. The biggest digital asset has recently fallen past a key technical level, trading below $28,000 on Tuesday and falling further from the psychologically important zone near $30,000.
“What is not helping Bitcoin is all the attention to memecoin Pepe,” said Edward Moya, analyst at broker Oanda. “The meme coin has collapsed, triggering massive losses for latecomers. For the global crypto market cap to make a serious run higher, these meme coins can’t attract that much attention.”
Write to Jack Denton at [email protected]
