In the cryptocurrency world, you remember the PEPE storm in March and April. With the comma shifting to the right, the investors of meme coin made significant profits. On the other hand, the war between the SEC and Binance caused the cryptocurrencies to lose value significantly.
Crucial bend for meme coin PEPE
SingularityDAO’s research reveals the skewed profits of Pepecoin (PEPE) investment, from which early participants derive most of the returns. Study reveals high-risk environment due to disproportionate holdings of “whales”. It also makes most traders more susceptible to loss. Pepecoin (PEPE), a meme coin with the theme of ‘Pepe the Frog’, recently rose like a phoenix in the bustling blockchain environment. But it has trapped most of its investors in a high-stakes game of chair snatching. A report by SingularityDAO points to the alarming reality that early investors are taking away most of the earnings, thus consuming a significant amount of liquidity.
In the first week of Pepecoin’s issuance, the meme coin sprouts from a meager five-figure market cap to a staggering $33 million. This stage accounted for more than 80% of potential profit. By mid-May, the tokens had reached a market capitalization of $1.8 billion. It eclipsed the trading volumes of famous meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB).
Concern for meme coin
However, this massive rise was noted as analysts reiterated their concerns about the tokens being collected in a few hands. This factor has made PEPE’s price action dangerously dependent on a select group of investors. Since its peak in May, PEPE has fallen sharply by 73%, according to CoinGecko data. Liquidity has consistently proven to be a thorn. SingularityDAO Senior Quant Rafe Tariq paints a vivid picture of this scenario, saying:
“Limited net liquidity creates a high-risk chair game. Ordinary investors, deceived by the expectation of high profits, fail to realize that only a small percentage of investors will benefit, while the rest are doomed to burn.”
This risky landscape is further complicated by a small group of large-scale investors known as “whales” who hold about 25% of PEPE. Other large investors currently hold about 46% of the circulating supply. This asymmetric distribution of PEPE casts doubts on the price of the cryptocurrency. On the other hand, it creates a dangerous investment environment for hopeful investors. Tariq highlights this grim fact, noting that most investors “have already missed an opportunity to make huge profits before investing in crypto.” He also warns, “What seemed on the surface to be an exciting opportunity to make quick money was nothing more than false hope for the average individual.”
Red sea in the middle of the war
When we look at Kriptokoin.com, Meme coins are deeply affected by the war between the SEC and Binance. At the time of writing, PEPE is trading at $0.0000009053, down 22%. On the other hand, the situation is not different in another meme coin, Shib Inu. Shiba is trading at $0.000006552, down 17% at the time of writing. FLOKI, on the other hand, is trading at $0.00002087, down 34%.
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