Frog frenzy: Pepe hops into meteoric rally as memecoin creators unleash new trick

Memecoin creators are trying a new trick: creating tokens branded after "Pepe the Frog," a popular Internet meme.

Like many memecoins before it — which have subsequently crashed and burned — pepe has seen an extraordinary surge short-term, skyrocketing by over 266 times in just four days. The team behind the coin seems to have adopted a strategy of enticing users to forsake popular dog-themed tokens like dogecoin and shiba inu in favor of the popular internet frog meme. "The dogs have had their day; it's time for Pepe to take the reins," proclaims the project's slogan on its website.

Pepe debuted on the Ethereum mainnet with 420 trillion tokens that, in theory, possess no value. Yet, the price of Pepe has climbed, attracting so-called "degen" crypto speculators to join the frenzy. Trading volumes have exceeded $30 million on Uniswap, a prominent decentralized exchange on Ethereum.

Presently trading at approximately $0.00000008, Pepe has risen over 266 times from its April 14 value of $0.0000000003 (having lots of aspirational zeros is a feature of memecoin pricing). After the gains, its market capitalization has reached almost $33 million, per data from CoinGecko.

Pepe coin profit

At the project's outset, the price was so miniscule that one early pepe trader turned an initial investment of a mere 0.02 ETH ($40) to 63 ETH ($126,000), yielding a return 3,150 times the original investment. This was first noted by Sisyphus, a pseudonymous crypto analyst.

This pepe is not the only meme token featuring a Pepe theme that has witnessed a significant increase in value. For example, Arbi Pepe, a comparable coin, has emerged and soared over 100 times. Since its debut on April 17, Arbi Pepe has risen to $0.00033 from $0.000003, signifying that Pepe-themed memes are gaining traction among crypto speculators and marking a departure from the previously favored dog-themed memecoins.

Let the buyer beware

Over the past year, newer memecoins such as pepe have persistently surfaced, mainly due to the minimal effort needed for their creation, as pre-existing smart contract templates can be found on open-source software forums. Nonetheless, these coins are generally fueled by hype and lack substantial backing, resulting in their price movements often losing momentum following the initial excitement.

While the late 2020 and early 2021 popularity of dogecoin ignited enthusiasm for dog-themed coins, prevailing global macroeconomic conditions should serve as a warning for holders of popular meme projects that are perceived to possess value only for their comic appeal.

For instance, the bonk memecoin, launched on Solana amid great fanfare earlier this year, eventually experienced a decline, leaving holders in a challenging position. Although the coin has made a slight recovery in recent days, it continues to trade 80% below its peak on Jan. 5, according to CoinGecko data.

Consequently, it is still uncertain whether the current surge observed in pepe and comparable coins can be sustained or if they will adhere to the pattern of other memecoins that have emerged and then suddenly faded away.