A cryptocurrency trader has managed to make nearly $5 million in profit over a six-month period through a position in the memecoin named after the popular internet frog Pepe, investing $490,000 into the cryptocurrency to buy 365.96 billion PEPE late last year to only realize their gains now.
The trader has now deposited their funds on leading cryptocurrency exchange Binance after HODLing them for over half a year after buying them on MEXC, a cryptocurrency exchange, to secure a return on investment of nearly 1,000%.
According to data shared by on-chain analysis service, the trader’s profit with the move is of around $4.8 million.
This isn’t an isolated case, as an early investor in the meme-inspired cryptocurrency recently realized a gain of around $3.4 million from an investment of little over $460 they made in the cryptocurrency’s early days to realize a gain of nearly 740,000%.
These successes are driven by the speculative nature of mmecoins, which unlike traditional investments aren’t tied to the performance of an underlying company or market, but are seen as instead being tied to their respective communities.
To some analysts, memecoins are just driven by online buzz and social media trends and align with the greater fool theory of investing, wherein profits are made by buying assets in the hopes of selling them to a “greater fool” that’s willing to buy them later on at a higher price.
The cryptocurrency space, itself, has been associated with the greater fools theory in the past, with Neel Kashkari, who took office as president and CEO of the Federal Reserve Bank of Minneapolis on 1 Jan 2016, saying it’s “just a tool of speculation & greater fools.“
This was not the first time that Kashkari has come across as a crypto skeptic. Back in August 2021, while speaking at the Pacific NorthWest Economic Region (PNWER) annual summit held in Montana he said that he was less optimistic about Bitcoin compared to five or six years ago. Rather than sparking financial innovation, Kashkari said the current landscape of crypto is comprised of “95% fraud, hype, noise and confusion.”
Featured image via Pixabay.
