Pepecoin was a dangerous chair game: research report | CoinDesk JAPAN | Coin Desk Japan

The majority of Pepecoin (PEPE) investors are now playing a game of musical chairs as early participants earned the majority of the profits, according to a new research report from SingularityDAO.

The token lost a lot of liquidity after early participants took profits, the report said, and the majority of investors were unable to make meaningful profits.

Over 80% of the potential profits were generated in the first week Pepecoin was launched. During this time, memecoins with the theme of “Pepe the Frog” rose from tens of thousands of dollars to $33 million in market capitalization.

The token then peaked at $1.8 billion in market cap in mid-May, surpassing Dogecoin (DOGE) and Shiba Inu Coin (SHIB) in terms of trading volume.

Some analysts have repeatedly sounded the alarm about the movement of early Pepecoin traders and the absence of individual traders. The main risk is that too many tokens end up in a few hands and the price volatility depends on a few investors. Pepecoin’s price has fallen 73% from its May peak, according to CoinGecko data, and low available liquidity remains a concern.

“The limited amount of net liquidity creates a high-stakes game of chairs,” said Rafe Tariq, senior quant at SingularityDAO, in a research note. “Commercial investors are lured in with the expectation of big profits, but the reality is that only a small percentage of investors walk away with profits and everyone else gets burned.”

SingularityDAO also reveals that a small number of large investors known as “whales” hold about 25% of Pepecoin, while other large investors hold 46% of the current circulating supply. made it

“This means that a small number of investors have a high degree of influence over the price of the coin, creating a risky investment environment for aspiring traders,” Tariq added, adding that the majority of investors suggested that they were “missing the opportunity to make big profits already before investing in the coin.”

“While on the surface it looked like an exciting opportunity to make quick money, it was a false hope for ordinary investors,” Tariq said.

｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
｜Image: Pepecoin with a frog motif (from Pepecoin’s Twitter)
｜Original: Research Shows Majority of Pepe Investors Caught in High-Stakes Game of Musical Chairs