“Memecoins” – a hyper-speculative, ultra-volatile and somewhat peculiar class of crypto – are back in the spotlight after the latest digital token hit the market with stratospheric gains.
Pepe, a coin inspired by an anthropomorphized frog popular in internet memes, leapt nearly 7,000% in the 17 days after its April 16 launch, hitting a market value of $1.8 billion by May 5, according to data tracker CoinGecko.
Pepe’s rise has sparked renewed investor interest in memecoins as whole, with overall trading volumes jumping to $2.6 billion in the first week of May from $408,000 the week before, data from Dune Analytics data shows.
“Memecoins just flare up on occasion, and it’d historically happened when the market’s a bit choppy or sideways,” said Todd Groth, head of index research at CoinDesk Indices. “It’s almost like, if the market is not moving up fast enough, traders find these smaller tokens to trade with.”
Indeed, the latest memecoin frenzy comes as bitcoin’s 2023 rally stalls. The No.1 cryptocurrency has slid 6% since mid-April to $27,416.