Thomas Kralow, a crypto hedge fund manager, and founder of Kralow Capital and Kralow Ventures explores…
While some people believe that Pepe Coin has reached its maximum potential, it’s important to know that various factors influence the crypto market.
Recent news about the risks of the US default without a debt ceiling increase and the potential for increased government printing of money to fund the national deficit has created liquidity in the crypto market. This liquidity extends to meme coins like Pepe Coin, suggesting that it might signal a crypto summer’s onset.
How does the hype affect the price of meme coins?
While evaluating any coin and its potential, we need to consider two factors: its utility and its hype. Meme coins, including Pepe Coin, lack significant utility beyond their meme status, similar to Shiba Inu and Dogecoin. However, the power of hype in the crypto market cannot be underestimated, as it drives market sentiment and investment decisions.
Pepe Coin’s current market capitalization is around $660 million, making it one of the larger meme coins. However, when compared to leading meme coins like Dogecoin and Shiba Inu, with a market cap of $10 billion and $5 billion respectively, Pepe Coin still has room for growth, but it is also still far from being legitimate.
Is now the time to invest in Pepe?
I’ve spent nearly a decade investing in crypto. Me personally and my hedge fund have invested in various tokens — but meme coins were never part of our portfolio, and I would never recommend investing in them. As an investor, I always look for two main qualities of a token: one is the real-life utility, and the other is hype and marketing.
Meme coins have the latter, but they have no utility. They don’t have anything to support their price and reduce the price suppression when the hype dies out. Once that happens — and it always does — you have to rely on the utility of the token to sustain its price. Isaac Newton once said ‘I can calculate the motion of heavenly bodies, but not the madness of people.’ Same with meme coins — you can not predict their trajectory as it relies solely on hype.
Is now the time to invest in meme coins in general?
If you still want to get into meme coins, you need to diversify your portfolio and hope that one of them is eventually going to pick up like Pepe Coin recently did.
And even though Pepe became one of today’s biggest meme coins, it is still far away from being legitimate. Those who invested in Pepe Coin were lucky that it picked up, while thousands of others didn’t — and as investors, we can not rely purely on luck. It’s not a very sound investment; it’s just gambling, and those who invested in many other meme coins and lost their money can prove it.
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