Crypto Analysts Say Memecoin Serves Founders, Not Community as $PEPE Gains Traction
Memecoin, the meme-inspired cryptocurrency, has been gaining popularity, and some analysts doubt its legality. Renowned cryptocurrency analyst Benjamin Cowen has claimed that the concept of “strong community” behind the founders of these coins serves their founders more than their community and is, therefore, “junk”. He points out that the same gang created most of these coins and pumps and dumped them until they were no longer profitable.
Cowen’s remarks come as the Shiba Inu ($SHIB) and Pepe Coin ($PEPE), more famous for their internet meme roots than any other technological advancement, have gained widespread popularity. The Pepe Coin market has experienced tremendous growth despite allegations of possible insider trading. An investor turned his 0.125 ETH investment into $1.14 million in just a few days.
However, leading exchange Binance warns potential investors that PEPE has no built-in utility or value support mechanisms and that its contract owners can change transaction fees and prohibit features. Despite the dangers, memecoins like Dogecoin ($DOGE) and Shiba Inu are widely used as payment methods and have a market valuation of over $16 billion.
Investors are exposed to tremendous risks due to the emergence of memecoin, especially those who are not familiar with cryptocurrencies. Cowen’s concern about the coin’s authenticity is only natural because many people who bought it washed up underwater. Regardless of the need to take profits and return the initial investment, the confident investor risks turning into “outgoing liquidity” regardless of how strong the coin’s community is.
In conclusion, despite the popularity of memecoins like PEPE, investors should proceed with caution and due diligence. The cryptocurrency sector must also devise methods to separate useful coins from those created solely for profit. Investors should stay alert and knowledgeable as cryptocurrency markets change to prevent big losses.