A crypto investor made a considerable profit by purchasing $250 dollars of a meme coin (in two separate transactions) for 5.9 trillion PEPE (PEPE) tokens, just four days ago.
This is the record of his purchase on the blockchain:
If he sells at the current price, he will have earned a profit of $1.14 million or in other words, a return of +4,500 times.
In the last 24 hours, Pepe has increased another 35% and reached a $150 million market cap in just 6 days. This meme coin has literally made millionaires overnight!
PEPE has enjoyed its sudden popularity by branding itself as “the most 'meme-able' meme coin in existence.” Its creators have referenced the previously highly successful dog-themed peers, Dogecoin (CRYPTO: DOGE) and Shiba Inu (SHIB).
What are Meme Coins?
Meme coins, (more accurately tokens), also known as joke coins or meme-based cryptocurrencies, are a type of cryptocurrency that derives its value from internet memes, cultural references, or social media trends and typically have no intrinsic value, other than speculation.
These coins are typically created as a joke or as a parody of existing cryptocurrencies and often have no real-world use case or utility. Meme coins are usually created as a way to poke fun at the traditional financial system or to make a quick profit by capitalizing on the hype and popularity of internet memes.
Some popular meme coins include Dogecoin, Shiba Inu, and SafeMoon. However, it's important to note that meme coins can be highly volatile and speculative, with prices often driven by social media hype and speculation rather than any underlying value or use case. As a result, investing in meme coins can be risky and should be approached with caution.
Meme Coins are Gaining Popularity (again)
So far this year, there have been only a few meme coins that have shown significant growth momentum. Another meme coin, BONK (BONK), which is Solana (SOL) based, garnered traction earlier in the year and recorded parabolic gains. On Jan.4, BONK was up 2200% since going live, reaching $0.00000250 levels.
A Rise in Meme Popularity is a Sign of Increased Risk Tolerance
This current meme coin craze does highlight a key rise-on sentiment shift in the market. We are seeing that investors are now willing to assume more risk, which is likely due to more positive consumer sentiment.
We haven't seen such an increase in positive consumer sentiment to this extent since August of last year.
The rise in meme coins is a potential indicator that it's a good time to start front-running more speculative investment assets (such as low-cap altcoins).
While I don't recommend buying this meme coin (as it has likely already maxed out its maximum growth potential), it does provide an indication of the increased risk tolerance for the market (especially for highly speculative investments) and it's likely with this sentiment, we may likely see more highly speculative crypto-assets perform very well in the coming weeks and months.