An unknown trader made over $46 million in profit by trading the Pepe (PEPE) memecoin. Can the GameStop saga bring back memecoin season?
Trader made over 15,000x profit on PEPE
A savvy trader made $46 million in profit, which is an eye-watering 15,718-fold return on his initial $3,000 investment.
The unknown wallet bought $4.9 trillion Pepe for $3,000 on April 15, which is currently worth over $56 million. The trader sold $1.41 trillion PEPE for $7.4 million and is currently sitting on $3.5 trillion Pepe worth $38.9 million, according to Lookonchain’s May 15 X post.
Pepe’s current $4.5 billion market capitalization makes it the third-largest memecoin behind Dogecoin (DOGE) and Shiba Inu (SHIB). Pepe is up over 40% over the past seven days.
Memecoins "a symptom of a disillusioned generation"
The recent success of memecoins is a function of disillusioned younger generations, similar to the Punk music genre, which became a popular musical movement after initial criticism, according to Hao Yang, the head of financial products at Bybit exchange.
Yang told Cointelegraph:
“The success of memecoins can be seen, like punk rock, as a symptom of disillusioned young investors who have seen the opportunities afforded to their parents disappear."
Moreover, memecoins that reached billion-dollar valuations showcase the absurdity of the fiscal system, added Yang:
“By printing tokens out of thin air and pumping them to billion-dollar valuations, these creators are showing the absurdity of our current fiat system.”
Related: Bitcoin bottomed at $56K? BTC price chart hints at breakout within days
Is GameStop's GME stock boosting memecoins?
Pepe’s current rally may be associated with the resurgence of the GameStop stock craze. GameStop’s stock (GME) price started rising on May 13, after Keith Gill — the man widely credited with kicking off the 2021 GameStop short squeeze — unexpectedly returned to social media after a nearly three-year hiatus.
Pepe hit a new all-time high of above $0.000010 on May 13, a day after Gill returned to social media. GameStop shares rallied over 111% in the 24 hours after Gill’s return. Within a day, GameStop shares have surpassed Bitcoin’s yearly returns.
The GameStop rally is likely the main reason behind Pepe’s price rise, according to Xiaohan Zhu, the CEO of Meter. Zhu told Cointelegraph:
“The GME saga may be one of the factors contributing to PEPE's momentum. I attribute the recent board drop in crypto primarily to profit-taking and numerous large-scale projects getting listed on exchanges and thus absorbing much of the market's liquidity.”
While predicting the start of a holistic memecoin run is difficult, some traders believe that the profits from GameStop will find their way into altcoins, similar to the 2021 bull run.
Based on historical chart patterns, the 2021 altcoin rally was catalyzed right after the GameStop rally, according to crypto analyst CryptoAmsterdam’s May 14 X post, that referenced the below charts.
Not all memecoins are likely to benefit from the GameStop saga, but Pepe seems primed to rally even further because it offers a relatable narrative to the GameStop pump for retail investors, according to Aleksandra Artamonovskaja, head of art at TriliTech, Tezos.
She told Cointelegraph:
“Beyond being the most recognized meme on the internet, Pepe is a culture of its own and symbol against the establishment, symbol of freedom and hope - a relatable narrative of the GME saga."
Related: Altcoins will bottom in early summer before bull run — Analyst
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
