Meme Coin Frenzy: PEPE's 70% Plunge, Exchanges Profit, High-Risk Trading

PEPE Coin, a popular meme coin, has experienced a rapid decline in value this year, with losses ranging from 10% to as much as 70% since the beginning of the year. Despite this, the meme coin frenzy is far from over, as traders continue to engage with these assets, betting on the next viral success.

One reason meme coins continue to grow is because they are profitable for exchanges and market makers. The gap between the buying and selling price of meme coins is much higher than for bigger cryptocurrencies like Solana (SOL) and Ripple (XRP). This allows market makers to earn more from these trades. Exchanges are also taking advantage of it as Meme coin trading brings in millions in fees, and centralized exchanges (CEXs) have been adding them at a faster pace since 2020.

However, the rapid listing of meme coins comes with its own set of challenges. These tokens often experience massive trading volumes that far exceed their available liquidity, especially at launch. This mismatch between volume and liquidity can lead to extreme price swings, forcing market makers to widen bid-ask spreads to manage risk. Ultimately, this drives up costs for traders, making meme coins a high-risk, high-reward investment.

Even though meme coin hype has slowed this year, it’s far from over. Their mix of humor, community-driven support, and speculative appeal keeps attracting investors. As exchanges adjust their listing strategies moving from “allowlists” to “blocklists” to better manage new tokens, meme coins will likely remain a key part of the crypto world.