Pepe made huge waves in the spring of 2023, when it suddenly bursted onto the scene with a huge price rally. Pepe single-handedly revitalized the meme coin sector and brought some serious gains for its early buyers.
However, the Pepe coin price has entered a significant downtrend, crashing more than 75% since its all-time high.Will Pepe coin recover back to its all-time highs and possibly above? In this article, we’ll be exploring both the positive and negative factors that could affect PEPE moving forward.
However, PEPE's price action hasn’t been too exciting since it got listed on major cryptocurrency exchanges While these listings led to a huge price spike initially, they also marked the top of the huge rally that made Pepe a household name in the crypto community.
At the time I'm writing this, PEPE is posting a -44% price change in the last month. In the same time period, Bitcoin has dropped by 2.9% while Ethereum has gained a modest 0.15%. This sharp correction in the PEPE markets was bound to happen eventually since the coin increased from a market cap of practically zero to a market cap valuation of over $1 billion in the space of less than a month. Of course, it remains to be seen just how deep this price correction will go, as we’ve yet to see a major bounce in the PEPE market that would confirm the token has bottomed out.
The PEPE token is almost entirely fueled by speculationPepe is a prototypical example of a meme coin. While some projects with this label have tried to attach some utility to their tokens, the Pepe project doesn’t have any lofty ambitions and is perhaps most similar to Dogecoin, the original meme coin. On their website, the Pepe team even says that the coin is “completely useless and for entertainment purposes only”.While there is a roadmap on the Pepe project’s website, it doesn’t provide much detailed information and contains targets like “Pepe Academy” and “Pepe Tools” which the team doesn’t elaborate on at all.Right now, there doesn’t appear to be any indications that Pepe is planning to transform into a “serious” crypto project.
Most likely, it will just remain a simple meme token that will rise fall depending on how much hype its community manages to spin up around it.Buying PEPE is more like a gamble than a serious investment. If you have a low risk tolerance, it’s better to stay away from such projects since their price movements are entirely based on speculation and market sentiment, which can turn on a whim.The lack of any fundamentals or use case makes it very difficult to say if Pepe will recover or not.
REGULATORY CRACKDOWN ON CRYPTO EXCHANGES
Recently, we’ve seen U.S. securities regulator SEC (Securities and Exchange Commission) bring lawsuits against Binance and Coinbase, which are two of the largest exchanges in the cryptocurrency industry.While the contents of both lawsuits are different, the common thread between the two is that the SEC is alleging that both Binance and Coinbase list crypto assets which are allegedly unregistered securities. To be fair, most people who are interested in PEPE probably don’t care too much about regulations. After all, PEPE can easily be traded on decentralized exchange protocols like Uniswap, which operate through smart contracts on the Ethereum blockchain and can’t realistically be shut down by anyone.However, decentralized exchanges on Ethereum are more expensive to use, and offer a slightly worse user experience compared to their centralized counterparts. If centralized exchanges become much more strict about which assets they’re listing, Pepe could see some delistings, which would limit the number of people that would be likely to buy the token.
While the SEC has sued cryptocurrency exchanges before, this is the first time they’re suing the biggest players in the crypto industry. Depending on the results of the lawsuits, we could see a negative impact on cryptocurrency more broadly.The United States is one of the world’s most lucrative markets, and if crypto exchanges operating there can’t offer the majority of cryptocurrencies for trading because they might be considered securities, we could see the amount of capital entering the crypto market shrink significantly. This chilling effect could have a negative impact on practically all crypto assets, even meme coins like Pepe. Here, the Pepe project’s low-effort approach might be a double-edged sword.
Anyone that can spin up a new meme token smart contract within minutes and create a website can practically match the Pepe project’s fundamentals. Of course, the difficult part is to attract a large following, which is what the Pepe project has done successfully and what most other freshly-launched meme tokens fail to accomplish.
Invest wisely and DYOR before investing.