Data firm Messari said that the coin is the fastest-growing cryptocurrency hosted on Ethereum, the second-largest blockchain.
The surge in Pepe’s popularity was amplified by its quick listings on major centralised exchanges, including top platform Binance, said Messari analyst Chase Devens.
Binance says on its website that Pepe has “no utility” or “value support mechanism”.
It warns users about Pepe’s volatility and says the platform “will not be responsible for your trading losses”.
Binance did not immediately respond to a request for comment on Pepe’s leap.
The centralised listings also opened the door for derivative trading for Pepe, with leveraged exposures and volatility pushing Ethereum transaction fees higher, added Mr Devens.
As with other crypto tokens, the fortunes of memecoins are rooted in retail trading and often fuelled by online sentiment.
Dogecoin and Shiba Inu, the eighth- and 15th-largest cryptocurrencies respectively, often experience wild price swings.
Dogecoin was launched in 2013 and soared over 12,000 per cent to an all-time high in May 2021, before sinking nearly 90 per cent since then.
Shiba Inu has similarly dropped 90 per cent from its October 2021 peak.
Newcomer Pepe has more than 100,000 holders according to CoinGecko data.
The memecoin’s surge is “an intriguing phenomenon” said Mr Edmond Goh, head of trading at crypto liquidity provider B2C2.
“The latest coin explosion illustrates that there is still capital sitting on the sidelines waiting to be deployed.” REUTERS
NEW YORK – Move over Dogecoin?
“Memecoins” – a hyper-speculative, ultra-volatile and somewhat peculiar class of cryptocurrency – are back in the spotlight after the latest digital token hit the market with stratospheric gains.
Pepe, a coin inspired by an anthropomorphised frog popular in Internet memes, leapt nearly 7,000 per cent in the 17 days after its April 16 launch, hitting a market value of US$1.8 billion (S$2.4 billion) by May 5, according to data tracker CoinGecko.
Pepe’s rise has sparked renewed investor interest in memecoins as a whole, with overall trading volumes jumping to US$2.6 billion in the first week of May from US$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 CoinDesk Indices head of index research Todd Groth.
“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 per cent since mid-April to US$27,416.
Pepe, which trades for fractions of a cent, was down 60 per cent from its May 5 peak on Monday, though it still boasts a market cap of almost US$740 million.
This makes it the third-largest memecoin after Dogecoin and Shiba Inu, both born as Internet jokes referencing a Japanese dog breed, which command more than US$10 billion and US$5 billion of the market respectively.
Reuters could not immediately identify Pepe’s creators, and its Twitter account did not respond to a request for a comment.
Memecoins first exploded into mainstream view during 2021‘s Wall Street Bets movement, fuelled by retail traders.
They lack practical use beyond speculation, distinguishing them from more “mainstream” coins such as Bitcoin and Ether, whose backers say have potential as a means of payment or store of value.
Market players warned that traders and investors could get badly burned by memecoins.
“Human beings love to speculate,” said Mr Martin Leinweber, product strategist at MarketVector Indexes.
“I would still be very cautious to buy them. It’s gambling in its purest form.”
Pepe’s website says it was launched “for the people” with “no formal team or road map” and is “completely useless and for entertainment purposes only”.