Editor’s Note: This newsletter originally contained an overview of the Pepe memecoin that did not provide the whole picture of the history of the meme. We have updated the article and apologize to the community and our readers.

There’s never a dull moment on the blockchain. Here’s what you need to know this week:

Bitcoin

$98,908.07

󰍾

2.95%

Ethereum

$3,197.42

󰍾

6.42%

Tether

$1.00

󰍾

0.03%

XRP

$2.30

󰍾

3.86%

BNB

$921.14

󰍾

3.38%

Solana

$143.16

󰍾

6.29%

See the latest prices

MEME MANIA

Crypto traders are putting serious sums into memecoins and Bitcoin NFTs

After a long period of uncertainty for crypto markets in 2022, Bitcoin and Ethereum have both rallied this year to post major (roughly 60%) gains. In recent weeks, this renewed appetite for crypto has spilled over into memecoins and NFTs, reaching a fever pitch not seen since the height of the bull market in 2021. The result? Many low market cap tokens are surging and transaction fees on the largest blockchains are reaching new highs for the year. Here’s what you need to know.

Memecoin trading just reached a two year high — why?

Memecoin manias were a staple of the last bull market, with ridiculously named coins (frequently of the Shiba Inu variety) often putting up eye-watering gains within just hours.

And, well, it’s happening again: Last week saw more than $2.3 billion traded in memecoins, more than six-times higher than the week prior, and the highest level since May 2021. 

While there isn’t one clear-cult catalyst, traders have poured money into crypto since the banking crisis began, which has pushed crypto’s market cap back above $1 trillion and perhaps reignited some traders’ appetite for risk.

The most popular tokens during this run include ones named after the Pepe the Frog meme, the “Giga-Chad” meme, and the infamous Wall Street Bets subreddit. (A word of caution: While popular, trading these memecoins is extremely risky and many have a history of being “rugpulls,” or scam projects.)

What you should know about PEPE, the memecoin of the moment.

PEPE, which was issued around three weeks ago with a comically huge supply of 420 trillion tokens, has been leading the memecoin activity. The token is based on the Pepe the Frog meme, which first surfaced on the internet nearly 20 years ago as a comic-strip character.

After gaining popularity on Twitter, the meme token last weekend became the fastest Ethereum token to reach the $1 billion mark, before crashing more than 50% in the following days. Its meteoric rise, though, minted at least a couple (potentially temporary) millionaires — one trader turned a $250 PEPE trade into more than $1 million, while another spent $263 and flipped it into more than $3.8 million in profits. 

Out of 179 memecoins tracked by CoinGecko, PEPE is the only one other than Dogecoin (the OG memecoin) and Shiba Inu to currently be in the top 100 cryptocurrencies by overall market cap.

Memecoins are on Bitcoin too, thanks to BRC-20 tokens.

Memecoins have also hit the Bitcoin blockchain, thanks to the creation of a new type of token called BRC-20 tokens. Created in early March, they allow people to create fungible tokens (or, other cryptocurrencies) on Bitcoin’s blockchain — a divisive issue in the crypto community — and have reached a market cap of nearly $1 billion. 

To date, more than 11,000 different BRC-20 tokens have been created and at least one (the original called ORDI) has been listed on some centralized exchanges. BRC-20 tokens include a BTC-native PEPE, as well as tokens named MEME and PIZA. 

However, this spike in trading activity is causing a key issue for Bitcoin: higher network fees. Bitcoin was built primarily for payments — alternate use cases are clogging block space, which led transaction costs to jump from around $1.20 last week, to $20 at the start of this week. The PEPE frenzy caused similar issues on Ethereum, which saw gas fees roughly double since the token’s launch on April 19.

Why it matters… For a few, speculation on memecoins has led to massive profits, but that doesn’t come without risks too — sometimes memecoin frenzies even precede broad declines in Bitcoin and Ethereum. For the individual investor, crypto exec Chen Arad shared these words of wisdom with Decrypt: “We suggest a high degree of caution when considering investing in memecoins.”

TAKES

Warren Buffett’s latest crypto quip, a surprising Satoshi jab, and other key quotes from the cryptoverse

Satoshi sacrilege… “I don’t care what Satoshi wanted bitcoin to be,” tweeted Udi Wertheimer, the creator of one the earliest Bitcoin NFT projects. Rejecting the reverence often bestowed upon Satoshi Nakamoto, Bitcoin’s mysterious creator, and his intentions for BTC, Wertheimer went on: “With all due respect the guy left the project after 1 year … who cares what he meant for bitcoin to become … he’s not here, we are.”

Infamous SBF…  “It became clear to me that Sam got really addicted to fame,” was one of the observations author (and Axios writer) Brady Dale shared about Sam Bankman-Fried in discussing his newly published book about FTX’s collapse, “SBF: How the FTX Bankruptcy Unwound Crypto’s Very Bad Good Guy.” This week, lawyers for SBF moved to have most of the criminal charges against the FTX founder dismissed.

Buffett’s reservations… “We are the reserve currency. I see no other option for any other currency to be the reserve currency,” said Berkshire Hathaway CEO Warren Buffett at his company’s famed annual shareholder meeting in Omaha last weekend. Buffett, who once described Bitcoin as “rat poison,” hasn’t changed his stance, calling the idea that BTC could replace the U.S. dollar as reserve currency a “joke.”

NUMBERS TO KNOW

$200 million

The approximate amount, according to Ripple Labs CEO Brad Garlinghouse, that the blockchain company expects to spend on its years-long legal battle with the U.S. Securities and Exchange Commission over its XRP token. 

The SEC sued Ripple in 2020, alleging that XRP was an unregistered security. The case, which is the best-known example of the SEC’s growing claims that some cryptocurrencies are securities, is expected to have a ruling in the next three-to-six weeks. (Coinbase does not list securities.)

80

Number of countries that participated Monday in the launch of the World App, the web3 project of Sam Altman, CEO of ChatGPT’s parent company OpenAI. 

The World App is both a crypto wallet and a tool for proving online identity via Altman’s Worldcoin crypto project, which aims to scan people’s eyeballs (seriously) to authenticate individuals. The idea of retinal scans generated blowback among some in the crypto community when Worldcoin was first announced in 2021, leading Altman to tweet, “I definitely underestimated the visceral reaction to using biometrics.”

26%

The percent of family offices (wealth management firms that usually serve high-net-worth clients) that are invested in crypto, according to a new Goldman Sachs report — up from 16% in 2021. 

At the same time, the proportion of family offices not invested or interested in crypto has also grown, from 45% in 2021 to 62%. Meanwhile, a report from investment bank Brown Brothers Harriman & CO found that the events of 2022 had not significantly discouraged institutional investors from investing in crypto.

DISCLAIMER

This material is the property of Coinbase, Inc., its parent and affiliates (“Coinbase”). The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Coinbase or its employees and summarizes information and articles with respect to cryptocurrencies or related topics that the author believes may be of interest.

TOKEN TRIVIA

Who created Dogecoin?

Find the answer below.

Trivia Answer