NFT traders have sold Bored Ape Yacht Club NFTs at a lower price to allocate funds towards the trending memecoin PEPE. The cryptocurrency has surged in value by over 600 percent in the last two weeks, making it one of the best-performing assets in the crypto market.
Some traders used 672 ETH (worth over $1.2 million) acquired from the sales to purchase PEPE. Opinions are divided on the move, with some believing that dealing with the memecoin at the moment could be highly profitable. In contrast, others think the hype surrounding the token has reached a point where an upcoming crash seems inevitable.
Reasons behind PEPE’s surge in price
The memecoin has gained massive popularity in the crypto world, with its market capitalization surging from less than a million dollars in mid-April to over $1.7 billion on May 5. Even celebrities, such as the American rapper Soulja Boy, have joined the hype, claiming that they have become rich off PEPE.
I done got rich off #PEPE
— Soulja Boy (Draco) (@souljaboy) May 4, 2023
The impressive surge in PEPE’s price could be attributed to the positive condition of the cryptocurrency market, as Bitcoin and most altcoins went up shortly after the Federal Reserve announced a 25-basis-point interest rate hike.
While the policy has caused price swings in the opposite direction on previous occasions, this time, it has had a different impact due to fears of an impending recession, resulting in many economists expecting this to be the final rate hike.
“I don’t think the inflation battle is over, but we are in a situation where we’re seeing gradual disinflation,” said Gregory Daco, Chief Economist at EY-Parthenon. “We’re also in an environment where interest rates are high and elevated and therefore should be a constraining business activity, which should lead to further disinflation in coming months.”
Despite this, the gains made by PEPE in the 24 hours leading up to Monday far surpassed those marked by BTC, ETH, BNB and other larger-cap digital currencies, indicating that more factors could be behind the price surge.
These 14 BAYC were all sold below floor over the last 48 hours
All 672E ($1,276,800) was immediately thrown into $PEPE by the sellers pic.twitter.com/cizdumtu5t
— Cirrus (@CirrusNFT) May 7, 2023
The surge in PEPE investments also captured the interest of cryptocurrency whales, evidenced by a single holder who traded the majority of their wallet assets to acquire 1.72 trillion PEPE tokens. This transaction included the exchange of WBTC worth $590,000, CULT worth $90,000, UNI worth $235,000 and ETH worth $37,000 to secure the PEPE investment.
Additionally, some other investors have taken advantage of the increase in value to secure significant gains at the start of the week. One investor traded 3.4 billion PEPE tokens for 925 ETH, resulting in a transaction worth $1.8 million. The investor achieved an impressive return on investment of 1,650x in just two weeks.
At this point when someone sells an ape below floor there's a 90% chance they're immediately dumping the ETH into $PEPE pic.twitter.com/B3FzEl8o1X
— Cirrus (@CirrusNFT) May 6, 2023
Another potential factor that could increase PEPE’s value is the hype and buzz surrounding the memecoin. The fear of missing out phenomenon, which is prevalent in the crypto sector, has been connected with other memecoins in the past, including Dogecoin and Shiba Inu, which also experienced colossal price spikes at some point.
It remains to be seen whether PEPE will follow in the footsteps of other memecoins which have attracted a substantial number of investors in the past few years. In 2021, Dogecoin hit its peak and skyrocketed to almost $0.75, reaching a market capitalization of nearly $90 billion. As of now, it is one of the top 10 largest cryptocurrencies.
