The meme coin tornado is slowing down as the PEPE price drops; this scenario benefited the Bitcoin network significantly. At press time, the popular meme coin PEPE was trading at $0.000001735, dropping 8.08% in the last 24 hours; its market cap dropped by 8.08% to $679 Million, which once reached $1.6 Billion.
After its launch, the frog-themed meme coin hiked 124.86% to reach its all-time high of $0.00000431 and is now down by 171.83% from its high.
The Meme Coin Frenzy and Bitcoin
Even though the meme coin dropped considerably, the overall market gained 1.7%. At least for now, the scenario suggests that the meme coin frenzy is near its end. Speculations indicate that people often sell some of their Bitcoin and Ether holdings to invest in high-risk meme coins.
In the same timeframe of the PEPE coin frenzy, BTC fell by 8%currently trading at $27,344.22 with a 24-hour gain of 1.84% and a 7-day drop of 3.30%. While Ethereum fell by 8.70% and, at press time, was trading at $1,823.88 with a 24-hour gain of 0.93% and a 7-day drop of 2.39%.
Kyle Doane, a trader as a digital asset manager at ACRA, commented on the PEPE coin, arguing that such scenarios are like a lottery. He also compared the type of trading with centralized casinos.
Such meme coin craze signals a local market top, followed by a multi-month drawdown for Bitcoin and others. A similar incident happened when the dog-themed meme coin DOGE was a rage in 2021.
The director of the Texas State Securities Board enforcement division, Joe Rotunda, said that “when the buzz disappears, and the hype dissipates, the value tends to plummet and investors can suffer significant losses.” He also argues about the problems in cashing a meme coin.
However, considering the trading volume of PEPE, such a problem might not occur for the frog-themed meme coin.
As the meme coin minting madness is seemingly fading away, the number of pending unconfirmed transactions in the meme pool decreased to around 250,429, probably because the transaction fees stabilized.
However, the daily BTC transactions are still higher at around 631.503k, per the data, probably because the average transaction fees dropped to approximately $3.76, which hiked to nearly $30 on May 8, 2023, as the demand for block space increased dramatically during the height of BRC-20 and Ordinal Inscription mania.
Such trends are common in the crypto industry; a craze behind a sector comes and fades away. Besides this meme coin mania, NFTs were all the rage a while ago, causing ripples across the industry. A trend is short-lived, and its long-term effects are limited.
Such craze or mania could be an opportunity for short-term investors to gain immense profits, but they also come with associated high risks. Hence, veterans tend to avoid indulging in such craze and mania instead of sticking with old-school scenarios.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/05/15/meme-coin-minting-madness-taper-off-aiding-bitcoin-network/