It is all the more surprising that the Pepe Coin (PEPE) was able to reach a peak market capitalization of 1.6 billion US dollars within a few days. As if there was a need to throw another coin comic representative onto the crypto market after Dogecoin, Shiba Inu and around 10,000 other memecoins.
Memecoins: Money Destroying Machines
In the meantime, the Pepe Coin price has collapsed again and the market capitalization “only” oscillates around 600 million US dollars. Not to sound high school, but don’t crypto investors have anything better to do than invest their capital in projects that don’t produce anything, that don’t have sustainable value creation?
There are numerous crypto projects that are innovative and need money. If the money flowed there instead of in memecoins like Pepe, then the entire crypto sector would benefit significantly more. If we want the sector to grow successfully, then we also have to deal with an efficient allocation of capital.
Pepe: Image damage instead of adoption
Now one or the other may claim that more people are finding their way to crypto through Pepe, ergo the memecoin at least has a positive effect on crypto adoption. I do not think so. First, most people lose money investing in memecoins, so there is a risk of leaving behind scorched earth. Anyone who has lost money and feels cheated afterwards will tend to keep their hands off the crypto sector when in doubt.
At the same time, it is also reported to the general public. Crypto critics feel once again confirmed, so that they agree in the tonality: “Look, this is crypto!” Pars pro toto, an innovative industry is thus taken into kinship, because the general public often does not manage to distinguish between the crypto projects that offer added value and Pepe and the like.
Pepe and the United States
Especially in the US, where there is a fierce fight against crypto, Pepe really isn’t the crypto ambassador we need right now. The cartoon frog has so far been abused primarily by Trump voters and people from the right-wing spectrum, now the crypto community is following. I’m curious where he will end up.
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