The biggest new memecoin of 2023, Pepe (PEPE) suffered one of the worst possible fates that can befall a new crypto asset; a partial rug pull — after its anonymous developers abruptly sold nearly $16 million worth of the token on Aug. 24.
The official Pepe X (formerly known as Twitter) account explained the drop was due to “three ex-team members” going behind their back and selling the tokens without their knowledge — a move that saw the price of Pepe plummet as much as 26% in the days following, without much respite.
an announcement to the $PEPE community:
Yesterday on August 24th, 2023, a series of unexpected transactions took place from the $PEPE multisig CEX
Wallet in which ~16 Trillion $PEPE tokens (worth roughly $15m USD) were transferred to various crypto exchanges (OKX, Binance,… pic.twitter.com/iZmXV1TAvw
— Pepe (@pepecoineth) August 26, 2023
In the wake, crypto investors and memecoin enthusiasts are still scratching their heads — pondering if the frog-themed token could ever hope to return to pre-rug prices.
Speaking to Cointelegraph, crypto trader Reetika Trades saw some potential positivity for PEPE, despite admitting the manner in which the devs sold wasn’t ideal. She believes that the event will ultimately have “negligible effects” on the token’s outlook in the long run.
“It’s a memecoin with no promise of utility, so some devs leaving makes no difference to the token,” she said.
“By selling a lot of the coins now, the threat of the total number of potential coins the devs could dump on people has reduced in the future — which is healthier in the long run.”
However, Reetika also pointed out that Pepe is a memecoin that has made its name by being forward that it is fundamentally worthless and has no underlying value upon which to price it. As a result, the price of memecoins are prone to extreme volatility, and any investment in these assets should be treated as more akin to gambling.
Similarly, pseudonymous trader Horse said that getting the remaining supply of the tokens out of the hands of the developers who sold was a beneficial move long term, especially if it’s “attempting to become similar” to Dogecoin (DOGE).
“I think it will make a comeback.”
These sentiments were echoed in a report from crypto data provider Kaiko, which noted that despite the sudden crash in price, the liquidity of the memecoin held up surprisingly well.
“It seems that the team’s potential abandonment of the project is not yet the death sentence that some have proclaimed,” Kaiko researchers concluded.
However, not everyone agrees that the future is distinctly bright for Pepe.
Pepe might not be coming back
Analysts from Santiment warned that traders should expect “higher volatility” despite Pepe becoming the top trending cryptocurrency in the wake of the rug pull allegations.
If you are riding the wave of #memecoins during these uncertain market conditions, #Pepecoin has quickly become the top trending #crypto topic this weekend. Former team members are accused of removing $16M. Expect even more high volatility than usual. https://t.co/iQLD7h224s pic.twitter.com/UOR4sTcWwv
— Santiment (@santimentfeed) August 27, 2023
Offering possible the most bearish take on Pepe was prominent trader Kaleo, who said he hoped that the memecoin “completely collapses.”
This may be a controversial take, but at this point I hope $PEPE completely collapses. While I understand a community has developed outside of the founders – the fact remains, as long as the coin survives and does well – the founders continue to do well with it.
And they don’t…
— K A L E O (@CryptoKaleo) August 26, 2023
Even following the announcement of the new direction from the Pepe team, Kaleo said he would remain on the sidelines. However, he admitted that Pepe would probably “rally to new highs from here just to spite me because I decided to take a perceived moral high ground and sideline myself.”
Meanwhile, in the wake of the turmoil with Pepe, one anonymous team has ventured to create yet another spin-off of the original Pepe token, one that they claim is free from the issues that came along with its predecessor.
Speaking to Cointelegraph, the team behind the project described the new PEPE token as the “true essence” of decentralized finance (DeFi).
“The new Pepe token is essentially what the old Pepe token should have been; decentralized, community driven, no team tokens and deflationary,” they said.