In this Edition:
- I share my thoughts on what could be the Fed's latest rate hike, Bitcoin passes a new all-time high the exodus of cryptocurrency exchanges and the launch of SUI.
- The Altcoins of the Week
- We delve into the $PEPE "project"
Fed's latest rate hike? Possible reversal on the way!
The Federal Reserve is giving sequel vibes like the Fast and Furious series, with round 10 and a 25 basis point increase.
This hike takes interest rates to the highest levels since 2007, and we all know what happened next. Recession. With a reference rate now between 5% and 5.25%, interest rates are higher than the latest CPI, which is 5%.
The 2% inflation mandate remains the number one priority for the Fed, at least for now. Even at the risk of putting more banks out of business.
This has been the most aggressive rate hike cycle in the US since the 1980s. But it looks like the saga may be coming to an end soon. The banking sector could certainly use a breather right now! Fed Chairman Jerome Powell's statement was slightly more accommodative than last time.
Saying that the Fed is 'close or perhaps already there' to a pause. But here's the missed signal: the Fed removed all previous language indicating further hikes in the future.
And for the banks, Powell went all-in like Jim Cramer. Powell said conditions in the banking sector had 'improved overall since March' and the US banking system was 'solid and resilient'. But just hours later, PacWest Bancorp's stock plummeted 50% in after-hours trading and is being considered for a sell-off.
Will PacWest Bancorp be the next banking system to fall? If PacWest fails, it will become the fifth largest banking failure in US history. But that's not all, Western Alliance Bank has collapsed 45% since the Fed's interest rate hike. Get ready!
Banks are failing, but Bitcoin reaches new all-time highs
Unlike banks, Bitcoin doesn't miss a beat and is in fact reaching new all-time highs. OK, maybe not yet in US dollar terms, but still Bitcoin is flying right now. Bitcoin's daily transactions hit a new ATH and, brace yourself, on the very same day as First Republic's collapse.
Of the record-breaking 682,281 daily transactions on 1 May, about 54% of those were NFT.
What happens when you mix Bitcoin's Segwit (2017) and Taproot (2021) updates with a strong case of NFTs' FOMO? Boom! Bitcoin's "ordinals" are born.
Launched on Bitcoin's network in December 2022, NFT 'ordinals' can store data such as text, images and video. But most of the NFTs issued, or inscriptions as they are called in Bitcoin, were just plain JPEGs like those of ERC-721 on Ethereum! But the community had bigger ambitions for Bitcoin. Here came the BRC-20 token standard.
Goodbye boring BRC-20 text files and welcome to the era of BRC-20 smart contracts. NFT 'ordinals' are now programmable and unstoppable. Users can issue smart contracts, create tokens and transfer them over the Bitcoin network. And with that, the demand for Bitcoin has grown by leaps and bounds since the halving of 2024. Ordinals have surpassed 3 million registrations and Bitcoin miners are lining their pockets.
More transactions mean more transaction fees. Miners are making so much money right now that their turnover has reached an 11-month high.
The "ordinals" just hit an ATH for commissions paid to miners in a single day, having hit 28.4 BTC ($810,277).
We have to be cautious here and hope that transaction fees don't do as they did on Ethereum. But let's also remember that every NFT and BRC-20 issued is making Bitcoin more and more secure. A lot of new miners have come online, pushing Bitcoin's hash rate to a new ATH as well. It's proof that Bitcoin can indeed go parabolic in a banking crisis.
The flight from exchanges is already underway in the US.
Coinbase and Gemini have launched offshore exchanges for derivatives. After growing tired of US regulators, cryptocurrency exchanges are starting to say 'whatever, we'll move elsewhere'. Although Coinbase and Gemini have not yet closed their doors in the US, they are certainly hedging their bets and preparing for the day when they might do so.
Coinbase obtained a licence in Bermuda and a few weeks later launched its new derivatives exchange.
Coinbase International Exchange supports non-US institutional traders. Institutions will have access to futures trading for Bitcoin and Ethereum.
Then there is Gemini Foundation, a non-US trading platform for Bitcoin futures regulated by Singaporean laws.
It is not available specifically to users in the US, UK and EU.
The West will look back in the future and realise they made a big mistake.
Speedy Sui launches the long-awaited Mainnet
Aptos, makes way for Sui, the new kid on the blockchain blockchain blockchain blockchain blockchain blockchain. Sui is a super fast Layer-1 blockchain that successfully launched its mainnet this week.
The blockchain is extremely fast, arriving as much as 30 minutes before its scheduled launch. Based on the performance of the testnet, the blockchain can already achieve between 10,871 transactions per second and 297,000 TPS.
This is much faster than Solana, which has a TPS of around 4,000. The mechanics of Sui's launch were slightly different, but it still entered the market with a fully diluted valuation higher than Avalanche, Solana, Aptos, Matic and Optimism.
Sui was developed by former Meta engineers who had already worked on the now defunct digital wallet project, Novi. The new Layer-1 saw an immediate response from some of the largest exchanges and was listed on Binance, Huobi, KuCoin, ByBit, OKX and Poloniex.
SUI is the native token and reached a high of $2.16 at launch, before stabilising around $1.33.
Astar [ASTR] has been integrated into Injective [INJ]. Astar is a parachain that serves as a smart contract / dApp hub for Polkadot. With this integration, Astar's assets can now be accessed on Injective and in the broader Cosmos ecosystem.
Astroport [ASTRO], the much-anticipated DeFi protocol that has moved from Terra to Cosmos, has launched a new testnet on the SEI blockchain, in preparation for the launch of the mainnet. SEI is a new blockchain under development built specifically for traders, with transaction finality in the hundreds of milliseconds range.
Cosmos [ATOM]is now connected to all EVM blockchains. In collaboration with Axelar's General Message Passing (GMP), Cosmos dApps can now become "interchain" by connecting and operating between Cosmos and all other EVM blockchains.
Curve [CRV]has implemented smart contracts on the Ethereum mainnet for its new stablecoin, crvUSD. The user interface for these smart contracts is still under development. Like DAI, crvUSD is a decentralised stablecoin, pegged to the USD and backed by a basket of other over-collateralised cryptocurrencies. Users can issue crvUSD on the Curve protocol.
Hashflow [HFT] has partnered with Moonpay. Hashflow is an Ethereum DEX. With Moonpay, Hashflow users can now use their debit/credit cards in 160 countries to buy and trade cryptocurrencies directly on the exchange. Awesome!
Sommelier Finance [SOMM]is one of the first Cosmos dApps to use GMP to connect to Arbitrum [ARB]. Sommelier Finance is an automated yield DeFi protocol. The team says it is in the process of preparing to connect to other EVM chains via GMP.
Let's delve into the $PEPE "project"
The PEPE memecoin cryptocurrency has managed to break into the top 100 cryptocurrencies by market capitalisation in just two weeks.
Here's everything you need to know about it.
The PEPE memecoin seems to be an extension of the cyclical market behaviour in the cryptocurrency industry, where every now and then a new memecoin appears, and the excitement surrounding it completely takes over.
In less than a couple of weeks since its launch, the PEPE memecoin has managed to enter the top 100 projects, reaching a market capitalisation of more than $400 million.
In this guide, we will take a closer look at what the PEPE memecoin is, who created it and why. We will also examine the stories of people who have suddenly become millionaires and whether or not they can enjoy their riches.
Let's find out together.
PEPE memecoin is a cryptocurrency that focuses on viral spread through the explosive nature of memes and how quickly they spread.
It is a memecoin with no intrinsic value and, as stated on the official website, no financial return. The PEPE memecoin cryptocurrency is designed to be 'the most memecoin that exists'.
The total supply of PEPE is 420.690 billion, 93.1% of which has been sent to the liquidity pool, LP tokens have been burned, and the contract itself has been waived. The remaining 6.9% of the total supply is held in a multi-sig wallet and is intended for future quotations on centralised exchanges, liquidity pools and bridges.
The PEPE memecoin ecosystem is growing by the day. At the time of this writing, the token already has over 65,000 holders and its official Telegram group boasts over 25,000 members and tens, if not hundreds of thousands of messages per day. Its official Twitter page, although created in April, already has more than 133,000 followers.
What is a Memecoin?
Memes have become an integral part of the Internet. They have existed since the very early days of Web1 and will probably continue to exist in the future.
Not surprisingly, they have also clashed with the cryptocurrency industry. While most coins tend to focus on some kind of utility, memecoins focus on being viral due to the explosive nature of memes and the speed with which they spread.
Examples include Dogecoin (DOGE) - the first memecoin that attracted mass attention and has been established among the top cryptocurrencies for many years. Others include Shiba Inu (SHIB), Floki Inu (FLOKI) and so on.
Finally, we have the memecoin PEPE - a cryptocurrency that has exploded in popularity in a way that, perhaps, no other memecoin has done before.
Brief history of PEPE
PEPE was launched in mid-April 2023, with the first entry point on Etherscan on 18 April.
Less than three weeks later, the cryptocurrency had a market capitalisation of over $420 million, entering the list of the top 100 coins by total market capitalisation.
At the time of writing, PEPE is traded on major exchanges such as Huobi, MEXC, OKX and others. In addition, it is available on multiple decentralised exchanges such as Uniswap.
What is PEPE? Definition and Background
According to the official website, the PEPE memecoin cryptocurrency is designed to be "the most memeable cryptocurrency in existence".
The page contains numerous references to other popular cryptocurrencies such as Shiba Inu (SHIB), Floki Inu (FLOKI), Dogecoin (DOGE), and so on.
By design, PEPE has no intrinsic value and this is clearly stated on the website:
"PEPE is a memecoin cryptocurrency with no intrinsic value or expectation of financial return. There is no official team or roadmap. The cryptocurrency is completely useless and for entertainment purposes only."
It is important to note that this is nothing new in the cryptocurrency field. Several cryptocurrency memes have been created in the past, claiming to have no value and explicitly alarming users that they have no value.
While joking about the lack of plans, the team outlined some expectations in the form of three different roadmap stages that can be viewed below:
The total supply of PEPE tokens is 420,690,000,000. The number itself is a tribute to the popular meme numbers 4:20 and 69.
93.1% of the supply was sent to the liquidity pool, the LP tokens were destroyed and the contract itself was abandoned.
The remaining 6.9% of the total supply is held in a multi-sig wallet and will be used for future quotations on centralised exchanges, liquidity pools and bridges. At least according to the official website. You can also track this wallet under the ENS name "pepecexwallet.eth".
The PEPE ecosystem
The PEPE memecoin ecosystem is growing by the day.
The official Telegram group boasts more than 25,000 members and tens, if not hundreds of thousands of messages per day.
His official Twitter account, although created in April, already has more than 133,000 followers.
Risks and Challenges
As is the case with most memic cryptocurrencies that tend to go viral, this one also comes with some risks and challenges.
PEPE has been one of the most volatile cryptocurrencies since its creation, and the price fluctuations are huge.
For example, on 1 May it more than doubled its price, increasing by over 100% in a single day. While this may sound particularly interesting, it is important to point out that it presents a number of risks.
There is a popular saying in the cryptocurrency world that goes:
"Prices go up with the stairs but down with the lift."
This suggests that even though it appears that PEPE is rising steadily, it could lose all of its current value just as quickly.
Remember, the creators themselves said it has no intrinsic value, so it is only worth what someone is willing to pay for it.
In addition, there are further problems on many of the exchanges associated with the lack of liquidity needed to cash in their earnings. This means that even if someone succeeds in making the trade of a lifetime, they may not have enough liquidity to cover their position.
This is the case of one person who turned a $27 investment in PEPE into an incredible $1 million but was unable to cash out completely due to various liquidity issues.
Naturally, if PEPE passes the test of time and is listed on additional centralised exchanges where liquidity tends to be higher, this concern may be alleviated. ( See BINANCE ).
The more popular a memecoin becomes, the more scammers try to profit from it and cheat people out of their hard earned money.
For example, this is a message from PEPE's official Telegram group:
Some community members have approached us about dusting/token scams that are occurring in our deployer wallet, as well as the CEX wallet. Anyone is able to fake a transaction and send these tokens to our wallets. I would say that every single coin that does this is a FRAUD. Many scam developers are dusting our wallets to make it look like we are doing airdrops or transactions with their tokens to trick people into interacting with them. Do not purchase any of these tokens or interact with them as they have the risk of emptying your wallet.
It is essential to follow some basic security rules when interacting with the DeFi ecosystem to avoid being scammed. Below are some basic security tips to keep in mind:
- Only use trustworthy hardware wallets to store large amounts of cryptocurrency.
- Never provide your phrase (seed phrase) to anyone, even if you are asked by a person or a seemingly trustworthy website.
- Always check the URL of the website you are visiting. Many cryptocurrency scams occur through fake websites that look exactly the same as the original ones.
- Use only well-known and verified cryptocurrency trading platforms.
- Never use the same password for multiple accounts. Use a unique and complex password for each account you create.
- Never invest more than you can afford to lose.
By following these basic security tips, you can help keep your crypto funds safe and prevent scams.
In conclusion, memecoin PEPE has undoubtedly succeeded in attracting considerable attention within the cryptocurrency market, acquiring a total capitalisation of over $400 million in just two weeks after its launch.
Many are comparing PEPE to other memecoins such as SHIB, DOGE, FLOKI and so on, but only time will tell if this meme-inspired token will be successful in the long run.