🐻 Degens flip $250 into $1 million with $PEPE

GM friends 👋 . Happy Friday! Hate to break it to you as we head into the weekend, but Bitcoin has dipped back down under $30,000 and ETH under $2,000, even after its Shanghai update. It was going so well and now $250 million has been liquidated in crypto.

What the heck happened?! Honestly, we’re not sure. It wasn’t a FUD heavy week either. In fact, it was kind of a 🔥 week. Degens made millions overnight with $PEPE coin and Gary Gensler could be getting fired. Maybe folks just lost hope of seeing Bitcoin at $1 million 🤷‍♂️.

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In this issue

📣The big story of the week. Degens win big with $PEPE…but it’s not what you think.

🚀Bullish news. SEC Chair Gary Gensler could be getting fired and Texas passes a new crypto bill that would require crypto exchanges to have a Proof of Reserves.

🐻Big, bad FUD. Coinbase could be leaving US if they don’t receive regulatory clarity and Gary Gensler continues to refuse to give it.

📣The big story of the week

Degens win big with $PEPE…but it’s not what you think

Move over Dogecoin, there’s a new animal coin in town that’s giving a run for its money 👀 . The mini market pump has woken up the crypto degens and is getting them ready for meme coin season. Here’s what you need to know.

On Sunday, a little frog emerged in the market, going by the name of $PEPE 🐸. Branded after Pepe the Frog, one of the most iconic internet memes of our generation, it came as no surprise that the shitcoin would also become the “next hot thing”.

This thread gives a good breakdown of how this meme coin was birthed and began to trend on Twitter 👇️ 

Within three days of launching, this shitcoin ran up 21,000% in price, raked in $30 million in trading volume, hit over 10,000 unique holders and reached a market cap of $33 million.

In other words: people made money and a lot of it. To put it into perspective, here are some of the big winners of the $PEPE revolution.

Now, it’s easy to look at these successes and think, damn I missed out and wonder how you can find the next meme coin and win big. Well, here are a few important things to know before you jump on this trend.

1/ To win big, you have to get in early, but this rarely happens unless you’re an insider. It’s important to remember that these coins don’t just come out of nowhere. They are often pumped up by a small group of people who bought at the very start and hold most of the profits when it 10,000x.

2/ Just because it pumped once, doesn’t mean it’ll pump again. Once a coin has pumped 10,000x, chances that you’ll catch its next wave are very slim. That’s because 99.9% of these shitcoins are scams, rug pulls or honeypots. People get in and get out as soon as possible. That’s why it’s called “pump and dump”. So if you do get in late to a meme coin, know that you’re likely an exit liquidity for the early buyers.

3/ Just because you got lucky and bought early, doesn’t mean you’ll actually see a profit. This is where the liquidity issue happens. For instance, the person holding 6 trillion $PEPE worth $1 million isn’t actually able to liquidate it all for cash because the total liquidity pool of $PEPE sits under $3 million. In other words, there aren’t enough new buyers putting in liquidity for the holder to withdraw. That’s what people mean when they say that if you buy in now, you’re just an exit liquidity.

For even more perspective, that 6 trillion $PEPE will likely take 46,200 years to liquidate it assuming declining demand.

However, this doesn’t stop the degens from trying to strike gold with the next meme coin. Since $PEPE, several other shitcoins have emerged.

So the next time you hear about a meme coin pumping, know that it is likely just hype that’s orchestrated by a small group of people looking to pump and dump the coin. Even if you do somehow get lucky, remember to stay humble, not greedy 🙏 .

🚀Bullish news

🔥SEC Chair Gary Gensler could be getting fired! You read that right! US Representative Warren Davidson tweeted that he will be introducing a legislation to fire the boss of the SEC. His proposal is to replace the Chairman with an Executive Director, a role that current or former SEC Chairs are ineligible for.

📜 Texas passes a bill that requires crypto exchanges to show their proof of reserves. Way to go Texas! This is a great move towards bringing more transparency between exchanges and users rather than just regulating or banning them all together. If the bill passes the Senate and receives the governor’s signature, the new law could come into effect as early as September.

🐻Big, bad FUD

👋 Coinbase could leave the US if they don’t receive regulatory clarity. During Fintech Week in London, Brian Armstrong, CEO of Coinbase stated that “anything is on the table, including relocating or whatever is necessary”. Crypto has been struggling to thrive in the US compared to other countries because of the government’s chokehold over the industry. Despite Coinbase’s persistent efforts to work with regulators, we might lose another one folks.

🤦 Gary Gensler refuses to answer if ETH is a security. In a Congressional Hearing this week, Gensler was grilled by the Committee on various questions, including whether or not ETH is a security or commodity. Gensler refused to give a simple yes or no answer. Instead, he dances around the question, saying “it depends” and speaks in generalities. No wonder Coinbase wants to leave the US.