Pepe Coin Early Investors Reap Profits Despite Recent Market Struggles

The crypto market has been showing signs of gradual improvement, with various assets attempting to recover from the losses experienced by investors. Pepe Coin, a relatively new meme coin, has emerged as one of the top gainers, witnessing a notable 15% increase in value over the past day.

While short-term holders have been affected by losses resulting from the market crash triggered by SEC lawsuits, early investors appear to be in a relatively favorable position, having gained an advantage by getting involved early on. However, it is important to note that the situation is not as positive overall as it may initially appear.

According to a recent study conducted by SingularityDAO, early participants in Pepe Coin were able to enjoy the largest share of the gains. As a result, profit-taking by these early investors led to a decrease in liquidity within the Pepe Coin market. Consequently, the majority of investors are unable to generate significant profits from their investments.

Rafe Tariq, Senior Quant at SingularityDAO, provided additional insights into the current situation, stating:

“The limited amount of net liquidity is creating a high stakes game of music chairs. Everyday investors are being lured in with the hopes of big profits but the reality is that a small percentage of investors will walk away with profit, while everyone else will get burnt.”

The research indicates that out of the total unrealized profits amounting to 1.2 billion, only a maximum of 50 million can potentially be realized due to the existing liquidity conditions. It is important to highlight that more than 80% of the potential profits were accumulated during the initial week of Pepe Coin’s launch.

Significant Number of Whales Hold Upto 25% PEPE

On-chain data from ITB reveals that only 25% of Pepe Coin investors are currently experiencing positive returns, or are “above water.” Approximately 60% of investors find themselves in a situation where their investments are currently worth less than their initial investment, commonly referred to as being “underwater.” The remaining investors are in a break-even position, where their gains and losses essentially balance each other out.

The research also discovered that a small group of “whales” possess approximately 25% of the total supply of PEPE. In contrast, other large-scale investors hold around 46% of the circulating supply. SingularityDAO suggests that this implies a “minority” of investors wields a considerable level of influence over the price of the coin, thereby contributing to a riskier investment landscape.

Tariq commented on the speculative and risky nature associated with investing in meme coins like PEPE, saying:

“What appeared to be an exciting opportunity to make a quick buck on the surface was nothing more than false hope for the average individual.”

Disclaimer: The information in this article should not be considered financial advice, and FXCryptoNews articles are intended only to provide educational and general information. Please consult with a financial advisor before making any investment decisions.