Pepe, the meme-inspired cryptocurrency that quickly rose to prominence, might be an alarming precursor for Bitcoin, the leading cryptocurrency, Bloomberg reports.
The swift boom-and-bust cycle of the Pepe token, largely driven by a fear of missing out (FOMO) among investors, has had a noticeable impact on the crypto market, potentially contributing to a recent dip in Bitcoin's value.
Joe Rotunda, director of the enforcement division at the Texas State Securities Board, has cautioned about the potential risks tied to volatile digital assets like Pepe token. Rotunda likened crypto investing to a game of musical chairs, where investors frequently struggle to secure a safe position once the music stops.
Now that the initial hype surrounding such tokens has subsided, their values can plummet, leaving investors grappling with potentially significant losses.These concerns are becoming more tangible as Bitcoin's price has taken a hit. At press time, its price is sitting at $27,431 on the Bitstamp exchange, showing a slight increase of 0.1% in the past 24 hours. The flagship cryptocurrency is far from reclaiming the much-coveted $30,000 level.
This downturn in Bitcoin's price could be a direct fallout from the speculative frenzy surrounding new cryptocurrencies like Pepe.
This recent turn of events underscores the high-risk, high-reward nature of investing in cryptocurrencies, particularly those that ride the wave of internet trends and memes.