Investors who imitate the movement of “Pepeko Whale” ── Negative impact on the meme coin boom | coindesk JAPAN | Coindesk Japan

With Pepecoin (PEPE) going from zero to nearly $2 billion in market cap in just a few weeks and making millionaires in no time, investors are eyeing their next big cash grab, Memecoin. looking for

But those investors ignore the fact that PePecoin’s shock surges are extremely rare. Cryptocurrencies with little or no fundamental value, like Pepecoin and Shiba Inu Coin (SHIB), emerge from the Ethereum blockchain once every few years, but find the next Pepecoin. It’s next to impossible.

A handful of winners are surrounded by countless losers. According to CoinGecko, Pepecoin has a market cap of less than $650 million.

Transition of Pepecoin (dextools)

imitate whale movements

But even so, there are those who challenge it. Some simply mimic what early Pepecoin investors did. With on-chain data, this is easy. Wallets holding large amounts of tokens can be tracked on sites like DeBank.

Over the weekend, several newly issued meme tokens surpassed Pepecoin in terms of transactions. This brisk movement was attributed to whale watchers (those who buy assets by watching the movement of wallets holding large amounts of crypto assets).

Wallet, which holds more than $4 million in Pepecoin, purchased a meme coin called “HARAM” on May 13th. HARAM’s market cap jumped from $200,000 to $5 million in the next four hours, reaching $20 million in trading volume in the past 24 hours on the 14th.

Other oddly-named meme tokens such as RIBBIT, BOB, JEFF, and WEN surged in trading volume over the weekend. As investors flock to the memecoin, decentralized exchange (DEX) Uniswap saw a record $150 million hourly trading volume on Wednesday, compared to a normal $16 million, according to Dune Analytics. A significant increase from the ~$30 million level.

negative impact

On the other hand, there are also negative effects. DeFi protocol Total Value Locked (TVL) fell from $53 billion to $47 billion in the last 30 days. Part of that is likely due to market declines, but outflows from companies such as Agility LSD, which saw $500 million in outflows, may indicate that investor interest is waning.

Some memecoins are also suspected of fraud. Hundreds of memecoins appear every day, and when I look at DEXTool’s “live new pairs”, I see rag-pulls, such as token issuers selling their tokens to investors and then changing their code so they can’t be sold. fraud) seems to be on the rise.

Some investors may get huge returns, but the odds are slim. In the bigger picture, memecoin popularity could create a black hole that sucks liquidity out of the market, creating a potential roadblock for other cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH).

After an impressive start to the year, Bitcoin and Ethereum are hitting stiff resistance at $30,000 and $2,000, respectively, in what has been dubbed the “S**tcoin Spring.”

｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
｜Image: dextools
｜ Original: Investors Track Pepecoin Whales to Cash In on Meme Coin Mania as Wider Market Stagnates