PEPE Holder Turns $250 into $1M in Four Days. But Can They Sell It?

Is memecoin season really back?

A crypto investor swapped 0.125 ETH, then worth $250, for 5.9 trillion PEPE tokens four days ago. Those tokens are currently worth $1.02 million. 

But the PEPE holder could struggle to realize that profit, due to liquidity issues around the token. While the memecoin investor currently holds $1.02 million in PEPE tokens, upon closer inspection it’s clear that there is a difference between the valuation of assets “on paper” and real cash held.

“With 5.9 trillion PEPE tokens in their portfolio, it would take 46,200 years to liquidate these assets, assuming non-declining demand,” Grzegorz Drozdz, market analyst at Conotoxia Ltd., told Decrypt via email. “Any attempt to exit the position more quickly could lead to the price falling even below the purchase level.” Drozdz likened the problem to “billionaires looking to monetize their wealth,” adding that, “An attempt to sell the wealth could lead to a collapse in their share price.”

It’s akin to a previous case where Gurgavin Chandhoke made a memecoin called Pump Coin, which skyrocketed to a $4.8 billion market cap—with him owning “99%” of the tokens. However, due to the lack of market demand, Chandhoke was unable to sell.

“The issue with low liquidity tokens is not only the lack of buyers but also the fact that liquidity is typically concentrated in automated market maker pools.” Adrian Hetman, tech lead triager at Web3 bug bounty platform ImmuneFi, told Decrypt. He explained that the issue is due to “the presence of sufficient liquidity in the pool rather than the availability of buyers.” For the PEPE holder, Hetman added, “the sale amount represents a significant portion of the pool’s overall liquidity, resulting in considerable slippage during the trade. Consequently, the profits will not be close to the standard value one would expect when selling at the spot price.”

What is PEPE?

Pepe-the-Frog-themed memecoin PEPE has surged over the past four days after branding itself, “the most memeable memecoin in existence.” Its creators referenced both the crypto bear market and rival dog-themed memecoins Dogecoin and Shiba Inu, noting that “the dog days are over.” Over the past day, it’s up over 240%, reaching a high of $0.000000342851, per data from CoinGecko.

While PEPE’s surge has turned some early buyers into millionaires—on paper, at least—the lucky investor has yet to sell their tokens and has not replied to Decrypt‘s request for comment.