What is Pepecoin and is it capable of surpassing memecoins Dogecoin and Shiba Inu?

The market capitalization of Pepecoin (PEPE) has decreased by 65% as of May 12, following its peak of $1.54 billion just a week earlier.

Profit-taking seems to be the main factor contributing to this significant price adjustment, after the token surged from nearly zero to a high of $0.00000372 since its launch on April 14, establishing itself as the fastest-growing ERC-20 token in the history of the cryptocurrency market.

PEPE market cap performance since launch. Source: CoinGecko

What is PEPE?

Pepecoin attracts attention by emulating characteristics of memecoins, drawing inspiration from popular internet memes. The most recognized example is Dogecoin (DOGE), which features the famous Shiba Inu dog meme as its emblem.

Pepecoin is inspired by the “Pepe The Frog” meme, created by Matt Furie in his 2005 comic strip “Boys Club.” The anthropomorphic frog gained widespread popularity as a meme in the mid-2010s, with celebrities like Katy Perry and Nicki Minaj referencing it in their tweets.

Australian jet lag got me like pic.twitter.com/kriAAd6mZe

— KATY PERRY (@katyperry) November 8, 2014

In 2021, BarnBridge founder Tyler Ward introduced a low-resolution Pepecoin NFT collection that generated over $60 million in sales on the OpenSea auction platform.

Similarly, the anonymous team behind Pepecoin has capitalized on the meme’s current popularity on Twitter.

They spurred early adoption by launching a coordinated meme campaign. Concurrently, media outlets reported on early PEPE investors transforming thousands of U.S. dollars into millions within a week, encouraging more participants to join the excitement.

For example, the number of PEPE holders increased from minimal to over 105,000 within a month, as reported by CoinCarp.com.

PEPE holders count. Source: CoinCarp.com

However, despite these favorable price drivers, Pepecoin lacks any substantial use-case for the average user. This situation is reminiscent of Dogecoin, whose rise to fame in recent years has been more influenced by Elon Musk’s endorsement than its functionality as a token.

Can PEPE surpass Dogecoin and Shiba Inu?

PEPE currently represents only about 5% of Dogecoin’s market cap, which exceeds $10 billion. It also accounts for 10% of Shiba Inu’s (SHIB) market cap, estimated at around $5 billion.

“It wouldn’t be surprising to see PEPE exceed both at some point, even if just temporarily, now that it has gained credibility,” suggests Chase Devens, a researcher at Messari. The swift increase in valuation is primarily attributed to immediate listings on popular centralized crypto exchanges like Binance, Devens adds.

For instance, SHIB’s first centralized exchange listing occurred more than 260 days after its launch. In contrast, PEPE’s centralized exchange debut took place just six days after its launch. Furthermore, 22 days later, the token began trading on Binance, the largest crypto exchange globally by volume.

PEPE vs. SHIB market cap per holder. Source: Messari

“These integrations not only reduce the barriers for retail speculation but also allow large capital providers to offer off-chain market-making services,” notes Devens, adding:

“PEPE perpetual futures are now available on exchanges like Binance and Bybit, providing users with access to 100x leverage against PEPE’s price. In just a few days, PEPE derivative volumes have already exceeded daily spot trading volumes.”

The introduction of PEPE also coincides with a 100% increase in Uniswap’s daily active users on Ethereum, which is now nearing its all-time high of 90,000 from May 2021.

Many of these users have participated in memecoin trading, which includes other recently launched tokens such as WOJAK, TURBO, and AIDOGE.

Uniswap daily active users. Source: Dune Analytics/Messari

More challenges ahead for PEPE price?

As a word of caution, the enthusiasm and expansion of PEPE bear similarities to the concluding phase of the 2021 memecoin bull run.

Related: Pepe would be ashamed by PEPE investors

Notably, PEPE’s short-term gains appear to mirror DOGE’s price surge on the weekly charts. Additionally, its current correction resembles DOGE’s decline of over 90% from its peak of $0.75 in May 2021.

PEPE/USDT four-hour versus DOGE/USD weekly price chart. Source: TradingView

In essence, Pepecoin’s price may continue its current correction in the short term, potentially reaching $0.00000083, which is 35% lower than the existing price levels.

Furthermore, a Dogecoin-like 90% drop from the market peak would reduce PEPE’s price to $0.00000035, a level that acted as resistance in April 2023.

This article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and readers should perform their own research before making any choices.