Meme in May and go away
The mighty frog woke up the degen spirits again, but are the dog days over?
Weekly musing: slowly boiling.
As PEPE, a new meme coin launched in April, approaches a $2 billion market cap - albeit a highly illiquid one as we’ll see - the crypto market rejoices even if BTC and ETH remain stagnant on top of another interest rate hike by the US Fed. What’s next?
In the macro land, we’ll have fresh inflation data this week which should inform whether the Fed can pause the interest rate hikes as intended. Price increases remain stickier than expected and the labour market is hotter than ever!
This means the Fed won’t take the recession hint and therefore argue there’s more space to tighten monetary policy to fight inflation further, all this while the poor suffer and markets remain sluggish. And while banks continue to collapse.
This sad state of affairs brings us to PEPE, the meme coin which ignited a new wave of FOMO across the cryptoshere. But note the ownership of this project is highly concentrated and its success most likely is programmed by its creators.
The above is a cautionary message for those who don’t understand meme coins. Typically, a trader can profit from such risky projects either by being very early or from buying at periods of sideways accumulation after +80% drops.
Moreover, it seems that there’s very limited liquidity associated with the project, even after Binance listed it. The good news is that this type of parabolic meme coins tends to start on Ethereum and then trickle down to other L1s blockchains.
So it seems this summer will be the time to keep an eye on memes and degenerate activity to maximise one’s returns in the crypto casino. But beware of fake airdrops claiming to give free PEPE if you register on a shady website - scam alert!
Chart art: slowly hunting.
Three things: slowly depleting.
Kodi from Jarvis Labs explains why airdrop farmers risk ruining airdrops.
Jurrien Timmer from Fidelity explains how the Fed’s policy changed with time.
Awa Sun Yin explains how privacy tech, including zk-proofs, can go wrong.