The meme coin boom in 2024 has attracted greedy speculators looking for quick gains in a player-vs-player trading landscape. Despite some successful stories that made it to the spotlight, most traders have accrued losses—as with a PEPE whale who lost over $300,000 in the last two days.
In particular, data by SpotOnChain estimates this cryptocurrency whale has lost $188,000 in a 15-day $15.10 million trade. As suggested by on-chain activity, the whale started trading PEPE on May 4 with a $2.68 million purchase.
On May 5, the trader bought another stack of PEPE worth $7.754 million. Later, the multisig wallet likely sold it all on May 7 for $10.557 million and a $123,000 profit.
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PEPE whale FOMO and realize losses
However, the ‘Fear of Missing Out’ (FOMO) dominated the whale, as PEPE pumped in a meme coin mania comeback. Thus, the trader purchased $4.853 million worth of tokens on May 16 to sell two days later with losses.
On May 18, the whale deposited all its PEPE tokens on Binance at an estimated value of $4.542 million. This last trading activity resulted in losses of $311,000, overcoming the previous profits.
Known cryptocurrency influencers wonder whether the meme coin mania is finally over.
Meme coins and the greater fool theory
In conclusion, the trader’s unfortunate loss serves as a cautionary tale for those considering investing in meme coins. The risks associated with trading these highly volatile and speculative cryptocurrencies cannot be overstated.
Meme coins, such as PEPE, often lack fundamental value and are driven by hype and social media buzz. Traders who buy these coins are essentially gambling in the hope that someone else will buy them at a higher price.
This mentality aligns with the “Greater Fool Theory,” which suggests that profits can be made by buying overvalued assets and selling them to a “greater fool.”
However, this theory also highlights the inherent risk of such investments, as the market eventually runs out of willing buyers. When the hype dies down, and demand dwindles, traders can be left holding worthless assets, leading to substantial financial losses.
The story of this trader’s misfortune should serve as a reminder to approach meme coin investments cautiously. It is crucial to conduct thorough research, understand the risks involved, and never invest more than one can afford to lose.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
