Analysts have raised concerns about the behavior of investors who bought relatively large amounts of PEPE after its issuance on the Ethereum blockchain, turning about $1,200 of initial capital to over $9 million in just a few days.
The frenzy surrounding the frog-themed token last week sent the coin's market capitalization of a few thousand dollars to over $150 million and created massive hype, attracting liquidity from traders and spurring scores of look-alike tokens on other blockchains.
Exit liquidity remains a concern. Data shows trading pools for pepecoin on decentralized exchange Uniswap hold less than $4 million in available liquidity as of Tuesday, and so a sudden sale by a top holder is likely to hit prices immediately.
Trading volume for PEPE on centralized crypto exchanges has ballooned to an average of $300 million daily, but market liquidity remains relatively thin – which may, again, cause a steep drop in prices should a large holder liquidate his holdings.
The wallet holding the largest amount of PEPE is sitting on over $1.1 million worth of the tokens after acquiring them for a few hundred dollars' worth of ether (ETH), data from Flipside Crypto complied by pseudonymous @deebs_defi shows. The same wallet also owns $1.1 million in shiba inu (SHIB) and $1 million in floki (FLOKI), suggesting the owner is an active meme-coin trader. The investor holds $43,000 worth of ether.
While this wallet holds the largest amount of PEPE in a single place, other top holders may have spread their holdings across several wallets.
Data from Lookonchain shows five wallets connected to "pepecexwallet.eth," which received funds from the PEPE deployer contract, cumulatively purchased over 8.87 trillion PEPE after issuance for just $385, selling the stash days later for over $1.23 million.
The sales were mainly made through Uniswap, and a smaller amount was sold on crypto exchange Huobi.
Crypto analysts on Twitter, such as pseudonymous @louround_, said last week that almost 3% of PEPE holdings are connected to each other. He cited data from wallet analysis tool Bubblemaps.
“This causes a major risk for the market and holders as those wallets hold a token value superior to all the on-chain available liquidity,” @louround_ tweeted.
Crypto exchanges MEXC Global and Huobi are the largest commercial PEPE holders, with over 5.5% of the supply held.
PEPE was recently trading at $0.000000233615, down 22% in the past 24 hours, according to CoinGecko data.
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