Almost 90% of users trading meme coins launched from Pump.fun have lost their investment or made profits under $100. Despite these facts, only successful trades are noticed and create FOMO.
Some speculative tokens created through Pump.fun have accumulated millions in market capitalization, but profits have been wiped out by less than 10% of investors.
FOMO is driving Pump.fun Meme Coins
Earlier today, a 13-year-old created a token on Pump.fun while live streaming. To his surprise, the token quickly surged, and he swiftly liquidated all tokens for a profit of $30,000. However, as the story spread, those tokens increased in value to nearly $4 million.
Stories like this are driving FOMO in the community, and traders are pouring their investments into these speculative meme coins – ultimately becoming pump-and-dump tokens. Data from Dune shows less than 3% of traders made over $1,000 in profit with such meme coins.
Wallet distribution with profit on Pump.fun. Source: Dune
In fact, on-chain analysts have recorded several trades where Pump.fun meme traders incurred significant losses due to speculative investments.
Back in October, a specific trader bought five different meme coins just hours after their prices spiked. Ultimately, he lost money on each token, according to Lookonchain's report.
Another cryptocurrency influencer 'Flavius Daniel' reportedly lost nearly $1 million in meme money, according to his social media post. However, the cryptocurrency community is skeptical of his claims.
"Greed set in and I just used max leverage. left with $460... I think it’s time to look for a job," Daniel wrote on X (formerly Twitter)
Most Pump.fun meme coins have returned zero profits for the majority of traders. The platform itself still generates significant profits. Pump.fun launched earlier this year, allowing anyone to create a meme coin in just a few minutes.
Increased speculative trading and the popularity of Solana meme coins have greatly benefited this platform. Recent reports indicate that Pump.fun is preparing to launch its own native token and a professional trading terminal.
