Crypto trader turns $500K into $5.3 million in six months

A crypto trader has realized nearly $5 million in profits from a six-month position trade with the meme coin PEPE. The position had a dollar-cost average of around $500,000 and an approximate valuation of $5.3 million on sale.

Essentially, the address ‘0x42C8‘ withdrew a total of 365.96 billion PEPE from the crypto exchange MEXC in three days. At that time, from December 13 to 16, 2023, this stack was worth approximately $496,000, as reported by Lookonchain.

Six months later, on June 4 at 03:26 am UTC, the crypto trader deposited all the tokens to Binance. Interestingly, this usually means selling intention and suggests the trader has closed the six-month PEPE position with realized profits.

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PEPE was trading at $0.00001452 by the time of the Lookonchain post on X, resulting in a $5.3 million sell-off. Moreover, this sell-off represents 0.6% of the cryptocurrency‘s 24-hour trading volume and less than 0.01% of its capitalization.

Meme coins, such as PEPE, often lack fundamental value, while the hype and social media buzz drive their price action. Crypto 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.”

The ‘0x42C8’ whale could profit in this six-month position trade due to an increased retail demand for PEPE.

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 remain holding worthless assets, leading to substantial financial losses.

NOTE; DYOR.