Bitcoin may be the most widely recognized name in crypto, but its chief rival Ethereum has cornered a bigger share of the recent innovation in digital assets, whether it’s nonfungible tokens or decentralized finance apps. That’s because Ethereum’s underlying software is seen as more versatile and better able to handle bursts of activity without getting clogged up and slowing down. Now Bitcoin finds itself playing host to crypto’s latest speculative frenzy, a frog-branded “memecoin” called Pepe, putting the original crypto network’s technology under strain.
Memecoins are digital tokens depicted with an image — often an animated character or animal — that can quickly gain notoriety and soar in value. Although they have little practical use, they can draw an exuberant community of followers who hoard or trade them. (The name takes its cue from so-called meme stocks, such as Gamestop Corp., that were seized upon by retail traders during the pandemic and driven to stratospheric valuations based on social media chatter.) There are hundreds of memecoins, some worth almost nothing, others with market values of $100 million or more. Investors often leap upon a newly minted memecoin when it starts trading on a digital exchange such as Coinbase or Robinhood. Others pile in after them for fear of missing out. One famous memecoin, Dogecoin, ascended to stardom when Elon Musk tweeted memes based on the coin, which inspired a number of dog-themed memecoins such as Shiba Inu.
