Top 8 charts this week: PEPE, MUMU and Bitcoin
MetricsDAO blockchain analysts chart the PEPE and MUMU meme token craze and Bitcoin fake rumor selloff.
Metrics Minds Weekly #4
While stocks were dragged down by yet another interest rate hike and regional banks' woes, a cryptocurrency has been skyrocketing beyond anybody could have imagined.
We’re of course referring to PEPE, a token based on “pepe the frog” meme. Launched in April, it soared to a market cap of more than $500 million - a rise of over 2000 percent - in less than a week!
Meme coins - like the OG Dogecoin - are often created as a joke or to parody current events, making them popular among retail investors.
They are cryptocurrencies, and can be intensely volatile because their value depends not on any fundamentals but simply on hype and liquidity. There are over 200 meme coins in circulation.
Analysts amir007-Q63RX1 and adriaparcerisas delved deeper into the meme token fever that has gripped traders. Here is what they found:
Hype goes a long way for a short time
While PEPE’s growth has been astronomical, another meme, MUMU, is now breaking out as the data shows.
High gas, no problem
At the height of PEPE’s rise in mid-April, traders paid an average of 0.03 ETH (USD 56.15) per transaction in gas fees, 6x higher than the rest of the network’s average of 0.005 ETH (USD 9.36). Because the value of meme tokens can collapse within days of hitting Mt Everest-like peaks, traders are keen to transact while the market is still hot.
Meme tokens are very effective at attracting new users to the network in the short term. In mid-April, nearly 20,000 new users came aboard the Ethereum network, according to adriaparcerisas.
Big guys rule
Most of PEPE holders, as with any meme token, are whales. From baby holders with less than a thousand tokens to whales, with over a billion tokens, this chart shows them all.
The meme rule
As happens with such fast-moving, hype-based trades, most people lose while a small group makes massive profits. According to amir007, nearly 78% of users lost in meme trades.
Among the winners, some cashed out. One trader sold $2 million worth of PEPE using MetaMask swaps.
Bitcoin gets into meme
Around the same time as PEPE’s rise, the biggest of all cryptocurrencies was also on the rise. For over 100 hours, the price of PEPE and Bitcoin moved in the same direction as the chart shows.
Bitcoin hit by false rumor
Speaking of Bitcoin, even the biggest crypto currencies get influenced by rumors, according to analyst Ario. One example was a tweet on April 26, from prominent crypto news alerter DB (@Tier10k) that said wallets linked to Mt. Gox and the U.S. government had transacted large sums of Bitcoin, based on an alert by market intelligence platform Arkham. Following the tweet, Bitcoin was down 7%.
Among central exchanges, Coinbase had the highest activity. The biggest traders (whales) drove the trades.
Be it meme tokens or established, widely circulating cryptocurrencies, artificial things such as hype or fake rumors can suddenly move their prices unexpectedly. Whales are quick to move, but small traders can be caught out.
While the price of meme tokens is way more volatile, there is only a short window for profitable trades when such events happen (NFA). DYOR, verify the news, be aware of the risks and keep yourself updated on the rapidly evolving cryptocurrency landscape.
Check out the analysts' full dashboards to learn more:
- amir007-Q63RX1: Meme Token Craze | Twitter
- adriaparcerisas: From Joke to Investments — The Surprising Growth of Meme Tokens | Twitter
- Ario: ETH and BTC Sell-off — Impact of Fake News | Twitter
Read more of Metrics Minds Weekly:
- Top 5 predictions to watch after Ethereum Shanghai upgrade
- Affordable liquid staking soars after Ethereum Shapella upgrade
- Axelar bridges and the return of Solana Mango Markets
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