A savvy cryptocurrency trader reportedly turned $2,000 into more than $43 million by investing in the memecoin Pepe at its peak valuation, despite the token’s extreme volatility and lack of underlying technical value.

The trader made an over 4,700-fold return on investment on the popular frog-themed Pepe (PEPE) cryptocurrency, according to blockchain intelligence platform Lookonchain.

“This OG spent only $2,184 to buy 1.5T $PEPE($43M at the peak) in the early stage. He sold 1.02T $PEPE for $6.66M, leaving 493B $PEPE($3.64M), with a total profit of $10.3M(4,718x), Lookonchain wrote in a March 29 X post.

Source: Lookonchain

The trader realized over $10 million in profit despite Pepe’s price falling over 74% from its all-time high of $0.00002825, which it reached on Dec. 9, 2024, Cointelegraph Markets Pro data shows.

PEPE/USD, all-time chart. Source: Cointelegraph Markets Pro

Memecoins are considered some of the most speculative and volatile digital assets, with price action driven largely by online enthusiasm and social sentiment rather than fundamental utility or innovation.

Still, they’ve proven capable of generating life-changing returns. In May 2024, another early Pepe investor turned $27 into $52 million — a 1.9 million-fold return — according to onchain data.

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Memecoins are stealing the spotlight from altcoins

Despite their intrinsic lack of utility, memecoins continued to steal the spotlight from more established cryptocurrencies, Stella Zlatareva, dispatch editor at digital asset investment platform Nexo, told Cointelegraph:

“High-beta, i.e., volatile tokens, are stealing the spotlight. Case in point, memecoins surged 5.6% on average, with DOGE, PEPE, and FLOKI responding to rate cut optimism and broader crypto strength.”

Top 100 cryptocurrencies, weekly performance. Source: Cryptobubbles

While investor demand for memecoins has surged, it may also be siphoning capital from more established assets. For example, Solana (SOL) has fallen more than 51% since the launch of the Official Trump (TRUMP) token in January, according to Cointelegraph data.

Related: Friday’s US inflation report may catalyze a Bitcoin April rally

Memecoins “don’t tend to draw in much external capital flow; instead existing eco-system capital ‘round-robins’ from one meme to the next,” Dan Hughes, founder of the decentralized finance platform Radix, told Cointelegraph, adding:

“Even in the case of TRUMP, most of the inbound liquidity was outflow from other crypto assets, people selling their crypto portfolio to buy TRUMP in extreme FOMO [fear of missing out].”

SOL/USDT, 1-day chart. Source: Cointelegraph/TradingView

Insider scams and fraudulent activity have plagued the memecoin industry, and US regulators are taking note. On March 5, New York lawmakers introduced a bill aimed at protecting crypto investors from rug pulls and similar insider scams shortly after the scandal around the Libra (LIBRA) token, which was endorsed by Argentine President Javier Milei.

Magazine: Memecoins are ded — But Solana ‘100x better’ despite revenue plunge