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Thanh Nam from Binh Duong Province sold half his Bitcoin for US$5,000 to buy the hot meme coin Pepe at its peak.
But he was recently only able to sell the coin for a total of $2,000.
When the Pepe coin price hit $0.000004 on May 5 (bringing its market capitalization to $1.63 billion), Nam’s initial investment could have returned $7,000.
But he wanted more, so he decided to wait.
However, Pepe’s price plummeted to $0.0000017 only one week later. Nam then sold his tokens at a loss of $3,000
“If I had waited more, I would have lost even more”, he said.
Nam is just one of many who joined the Pepe craze recently.
According to crypto price tracking website CoinMarketCap, Pepe’s price spiked after its launch in mid-April. It peaked on May 5, then lost most of its value afterwards.
Meme coins are still widely considered a joke in cryptocurrency, however popular they get.
Pepe was built on the BRC-20 standard of Bitcoin, different from many other meme coins which use Ethereum’s ERC-20.
On its project homepage, Pepe’s developer said: “$PEPE is a meme coin with no intrinsic value or expectation of financial return. There is no formal team or roadmap. The coin is completely useless and for entertainment purposes only.”
Despite such disclaimers, new meme coins like Pepe still attract lots of investment.
Kyle Doane, who is in charge of transaction review at digital asset management company Arca, said that quite a few people sold parts of their top coins like Bitcoin and Ethereum to join the Pepe frenzy.
When Pepe peaked on May 5, both those coins’ value dropped by 10%, a considerable value reduction after four straight months of growth.
Joe Rotunda, director of enforcement at the Texas Securities Commission, said that when the hype surrounding a meme coin goes away, most people who invested in the coin suffer significant losses.
Even when one gains from a meme coin, obtaining the profit is not easy.
Merav Ozair, fintech expert at Cornell University, said he saw many who hit million-dollar jackpots investing in meme coins unable to withdraw their profits.
Meme coins like Dogecoin and Shiba Inu, which are still highly valuable, are the exceptions, not the rule.
Experts suggest that if investors want to try their luck with meme coins, they should only invest a small amount, and be ready to lose it all.
