A trader just turned an $895 investment into $321,000 overnight by investing in meme coins. Kakashi, a blockchain data analyst, tweeted on X (formerly Twitter) that the trader invested $895 in BitWite (BTW) on pump.fun, a popular meme coin trading protocol on the Solana blockchain, then sold $51,000 worth of coins and held over $265,000 worth of coins in his wallet, bringing his total realized and unrealized gains to over $320,000.
You can view the trader's Solana wallet here:
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The above trade is just one example of how traders can turn their small initial investment into a fortune in meme coins, with the trader above making 358x gains.
Risks of investing in meme coins
There is no denying the allure of the prospect of going from rags to riches in meme coin markets, but trading coins like BTW is fraught with risks. Most newly launched cryptocurrencies are either scams or run-and-drop scams, so the potential for losing your entire initial investment is greater than the potential for making significant gains.
A better risk-reward investment strategy is to participate in meme coin IPOs. Traders often face the fear of missing out dilemma when trading new coins on a decentralized platform like Raydium. When they see a sharp price spike, they rush to buy the coin at its peak price without doing enough research.
In contrast, cryptocurrency IPOs typically last for a few weeks, giving traders enough time to do their own research on the project before participating, thus reducing the possibility of making a bad investment decision due to fear of missing out (FOMO).
The benefits of IPOs are not limited to avoiding recklessness due to fear of missing out, but they also create a huge buzz that can significantly raise the price of the currency once it is officially launched.