Pepe has fallen 56% in the past five days, wiping out $1 billion in total market value.
New memecoin Pepe (PEPE) has seen its market cap drop by $1.1 billion from its May 6 peak, even as on-chain data shows it is still being bought by some crypto whales.
Over the past five days, memecoin’s price has plunged more than 56% from a peak of $0.00000431 to $0.00000193, according to Coingecko.
Pepe’s price drop has caused the token’s total valuation to drop from a peak of $1.82 billion on May 6 to $820 million at the time of publication.
A May 8 report written by researchers at cryptocurrency fintech firm Matrixport attributed Pepe’s sharp price drop to traders selling large holdings to new retail investors after the memecoin was listed on Binance, the world’s largest cryptocurrency exchange by daily trading volume.
Furthermore, the report found that the biggest driver of Pepe’s rapid price increase since its inception on April 14 appears to have come from traders in Asia. According to Matrixport data, buying activity during Asian trading hours contributed a staggering 3,657% of the total 9,071% gain witnessed by the memecoin as of May 8.
Another data point that could provide more validation to this theory is that within 24 hours of memecoin being listed on exchanges, Ethereum deposits surged to their highest level since November 2021.
Crypto market intelligence firm Santiment said this was largely due to early buyers of Pepe taking profits by converting their holdings back into ether, primarily through ETH swap purchases on decentralized exchanges such as Uniswap and 1inch.
Despite the dramatic price drop over the past week, some of the more well-known and infamous whales in the crypto space are still buying Pepe at lower prices.
According to blockchain analytics firm Lookonchain, former tech entrepreneur Jeffrey Huang’s online persona “Brother Sparrow” has purchased a total of 73.4 ETH (about $137,000) of Pepe in the past four days, with an average purchase price of $0.000002082, about 3% lower than the current trading price.
While other more meme-based coins like Dogecoin and its canine-themed cousin Shiba Inu have leveraged their material success to build more applications and use cases for their respective tokens, Pepe seems to be experimenting with the idea of providing value.
Essentially, Pepe’s anonymous development team has made it clear that the token is “completely useless,” and the humor of this alone is enough to get investors to “mock” it. The official website for the frog-themed token has a closing disclaimer that describes the token in the following way:
"$PEPE is a meme coin with no intrinsic value or expectation of financial return. No formal team or roadmap. The coin is completely useless and is for entertainment purposes only."
