A crypto trader turned an $895 investment into $321,000 overnight by investing in a meme coin.
According to a tweet by on-chain detector Kakashi, the trader put $895 into $BTW, a token on pump.fun, a popular meme coin trading protocol on Solana.
He subsequently sold $51,000 worth of tokens, leaving over $265,000 in his wallet. This means his total realized and unrealized gains are now over $320,000.
Readers can view the trader’s Solana wallet here: 4gVDRSy4UCvk85XsC2BMTbc66bM1BKeWPnMaK2scqDQ2
The above trade is an example of how a small initial investment can be turned into a massive fortune in the meme coin market.
In this example, the trader made a 358x gain.
The Risks of Investing in Meme Coins
The prospect of going from rags to riches in the meme coin market is very attractive to traders. But trading coins like $BTW is very risky. Most newly launched cryptocurrencies are either scams or pump-and-dump operations.
The chances of an investor losing their entire initial investment are far greater than the chances of making a good profit.
A potentially better risk-reward investment strategy is to invest in meme coin pre-sales. A big risk for traders when trading new coins on decentralized exchanges (DEXs) like Raydium is FOMO (Fear of Missing Out).
When traders see prices skyrocket, they often buy right in at the highs without doing enough research. In contrast, pre-sales typically last for several weeks.
This means potential investors have plenty of time to research the project before getting involved, reducing the risk of FOMO-related mistakes. And avoiding FOMO isn’t the only benefit of pre-sales.
Pre-sales also generate a lot of hype, which can lead to explosive price movements once the token goes live.