One unique use of the Ethereum blockchain that has recently crept into the Bitcoin world is a Memecoin named Pepe. Beside being a popular little guy, Pepe poses some Memecoin risks for Bitcoin. https://youtu.be/Jp2vdOlUu4E

1. By: www.ProfitableInvestingTips.com

2. Bitcoin is the most famous cryptocurrency and the
one with the biggest market capitalization.
Meanwhile, the Ether token, which is powered by
Ethereum software, has a wider range of uses
including non-fungible tokens, decentralized
finance with smart contracts, and blockchain
gaming.

3. One unique use of the Ethereum blockchain that has
recently crept into the Bitcoin world is a Memecoin
named Pepe. Beside being a popular little guy, Pepe
poses some Memecoin risks for Bitcoin.

4. What in the World Is a Memecoin?

5. A Memecoin is a cryptocurrency or digital token.
Unlike standard tokens, like Bitcoin, a Memecoin
has an associated digital image, usually an animal
or animated character. The meme part is because
these tokens can become wildly popular, soar in
value, and then crash, similar to meme stocks like
GameStop.

6. GameStop stock became an object of interest on
social media in early 2021. Many minded traders
bought on a short squeeze when Wall Street firms
were shorting the stock. To get out of the short
positions the firms needed to buy the stock at
higher and higher prices.

7. The stock was trading at $4 a share and rocketed up
to $80 before collapsing to $10 and then going back
up to $66. GameStop was not a good long term
investment but a stock with profit potential for
traders. Likewise, a Memecoin generally has trading
potential but is typically not a viable long term
investment.

9. Why Is Pepe the Memecoin an Issue for Bitcoin?

10. Generally, Memecoins are on the Ethereum
blockchain. However, in January the Ordinals
protocol came into being. This is a layer that sits on
top of the Bitcoin blockchain or ledger. It allows
users to attach or affiliate an image, a serial
number, or Memecoins named Pepe to a Satoshi, the
smallest unit of Bitcoin.

11. This might not have been such a big issue except that
they minted more than 420 trillion of these
Memecoins in less than a month. After a lot of
promotion on Twitter, Pepe the Frog Memecoin
launched in April and the total market cap went up
to more than $1 billion before falling by nearly two-
thirds.

12. Ethereum Efficiency Versus Bitcoin

13. The Ethereum blockchain underwent a big overhaul.
Ethereum scaling has made it more efficient.
Bitcoin does not have this efficiency. To a degree
this was not needed because Bitcoin is more of an
investment and trading tool, unlike Ether, which has
so many applications.

14. Then came Pepe and drove activity for the Bitcoin
blockchain through the roof. Increased activity
raised the cost of each transaction in the Bitcoin
system. The miners who do the work of verification
on Bitcoin made higher profits. But the higher cost
of transactions on the Bitcoin blockchain makes it
less attractive for its traditional users.

15. Can Memecoin Investments Be Profitable?

16. As noted by folks like NFT Now, the risks and
rewards of Memecoins are such that one can make
a lot of money trading these as lose money just as
easily. The Pepe Memecoin started trading April 17,
2023 and was priced at $0.00000019 each. That is
six zeros after the decimal point for a dollar. It
peaked on May 5, 2023 at $0.00000372 which is five
zeros after the decimal point or about 17 times its
initial price.

17. It then fell to $0.00000144 where it trades today. If
this is the pattern for Memecoin trading, a trader
needs to get in as fast as possible, wait for the hype
to drive the price up and immediately get out
before it collapses. There are no fundamentals that
drive these prices unlike Bitcoin which reacts to the
economy and generally tracks up and down with the
Nasdaq stock market. Prices are commonly driven
by hype and are prone to fall as the newness of the
Memecoin wears off.

18. For more insights and useful information about
investments and investing, visit
www.ProfitableInvestingTips.com.