• A new meme coin, PEPE, made an entry into the crypto market with a 7,500x price increase.

• But, several red flags have been raised by experts and investors need to be cautious.

PEPE became one of the fastest-rising cryptocurrencies after announcing its presence with a whopping surge of 7,500x a few days after launch. However, there were speculations of developer rug pull after the meme coin recorded a pullback of 60 percent.

PEPE did not stay down for long as it staged a quick rebound to regain 40 percent of its lost value. In the last seven days, the asset has surged by 426 percent to trade at $0.00000029955477.

An Ethereum account is said to have bought 1.8 trillion PEPE for $20 and saw it increase to $160,000. Another investor who bought 5.9 trillion PEPE for $250 saw his portfolio rise to $1.02 million. However, Grzegorz Drozdz, the market analyst at Conotoxia Ltd believes that it will take 46,200 years to liquidate these tokens assuming there is no decreasing demand.

Its ability to rise by a significant margin has triggered some level of excitement among crypto investors, but the token is, however, said to be highly speculative and very dangerous as an investable asset. 

Some reports have accused the developer of using his discretion to blacklist wallets. Not just that, he is also accused of manipulating the token supply. One of the blacklisted wallets reportedly held around $850,000 worth of PEPE. This is quite interesting as the owner of the wallet is said to have purchased PEPE for just $27 at the early stage. This raises the alarm of potential exploitation by those managing the project.

Other notable concerns about PEPE

Others have also raised concerns about the distribution of PEPE supply. This is because six wallets are said to have received a huge amount of PEPE with each holding over $1 million worth of PEPE. This development can lead to serious market manipulation and price volatility which could put investors’ money at risk. 

Multiple reports state that PEPE was completely anonymous and only appeared on Twitter days before launch. Also, the meme coin has another red flag relating to liquidity. Despite its huge market cap, its Uniswap Liquidity Pool is only $3 million. This is far from what a perfect liquidity pool should be. The problem is that a significant value of the asset could be wiped off when whales decide to sell. 

Another cause for concern is that PEPE has no roadmap, no plans to create fundamental value, and no team. This has been compared to EverGrow which has a similar-sized liquidity pool of $3 million and a market cap of $30 million. This makes the price good value. It has an incredible roadmap, good funding, and runs projects in DeFi.

PEPE has also been compared to another meme token, SquidGrow, run by the Shiba Inu Whale, Shibtoshi. It is building serious utilities and has a market cap of $15 million. In comparison to this, PEPE’s market cap has been said to be illogical. 

PEPE is very volatile, and cannot be predicted easily for the short term. Investors can make a profit or incur a loss on the asset depending on how the market participants decide to react to its red flags.

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