🐸 Are memecoins the next thing?

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GM everyone. This is 2036, the newsletter that makes you smarter on crypto in just 3 min a day.

Pepe the Frog is the unofficial mascot of crypto traders.

And last week, $PEPE, a new meme coin built around the mascot brand, skyrocketed 3,900,000% in just 4 days.

Of course, 43 more coins launched last week, trying to replicate its success.

So are memecoins the next big thing?

Let’s take a look.

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Pepe is arguably the most recognized unofficial brand for crypto traders, aptly named degenerates.

Spend just 5 min on crypto Twitter, and you’ll see at least a dozen profile pictures, memes, or references to Pepe the Frog.

$PEPE, a new coin, was launched exactly 8 days ago. Three days later, it was already up 4,500X.

As of today, it has a market cap of $126M.

That makes it the 7th largest memecoin on the market, just behind DOGELON MARS ($ELON).

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Here’s what you need to know:

1/ Memecoins exist to copy the success of Dogecoin and $SHIB

Dogecoin is Elon Musks’ favorite crypto. It’s the 8th largest cryptocurrency in the world, worth $11 BILLION.

$SHIB - another dog coin based on Elon’s liking for Shiba Inu dogs - is worth a cool $6 billion.

These coins were created as jokes but became part of pop culture (thanks, Elon).

Memecoins copy the mechanism of (likely) no utility, fun and crypto culture.

2/ Memecoins are primarily a way for insiders & influencers to get rich

10% of the entire supply of $PEPE is held by just a handful of people.

Two days after it was listed, the coin was promoted by a group of 20 or so large influencers on Twitter.

These influencers all owned a significant chunk of $PEPE already - purchased or donated as the coin was listed.

The coin then pumped thousands of percent as retail investors like you and I tried to get in on the next get-rich-quick scheme.

And influencers made a killing.

Sometimes, memecoins will go even further.

At the peak in 2021, Vitalik Buterin’s wallet held tens of billions of dollars of memecoins - mostly $SHIB - that were sent to him as a way to deceive others into thinking he was part of the project.

3/ Most memecoins are scams or rug pulls

99% of memecoins only live for a few weeks, make a handful of people rich, and then go to zero.

Anyone who didn’t buy in the first few days loses (a lot of) money.

We have no idea where $PEPE will go. Maybe it will join the ranks of $SHIB and $DOGE.

Or maybe it will be like $BONK - the Solana memecoin - that crashed in a few weeks.

Regardless, we’re staying far away.

All get-rich-quick schemes are just someone else trying to get rich off of you.

4/ Over the next few weeks, a lot more memecoins will likely pump

This is where FOMO kicks in.

People feel like they missed out on $PEPE. So they’ll pump whatever the “next” hot memecoin is.

Like this one:

This is classic human psychology. Greed takes over, and all reason gets thrown out of the door.

We can’t tell you what to do, except to be careful.

99%+ of the people who invest in these coins get burned and lose - sometimes millions.

It’s a crazy world out there. So take a deep breath and remember that:

• crypto is a long game

• we’re still very early

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