High recent on-chain activity has registered at least three smart traders taking profits from the popular meme coin PEPE. These cryptocurrency whales have made millions of dollars in trades as retail jumps in with ‘Fear of Missing Out’ (FOMO).
Finbold gathered this data from four different Lookonchain reports posted on X on May 22, suggesting a reversal could happen.
PEPE smart traders’ whale activity
First, an early buyer deposited all their 182.9 billion PEPE holdings, worth $2.53 million, into a Binance account. This was the remaining amount of a $462 initial purchase of 324.9 billion PEPE last year. In total, this smart trade rendered over $3.4 million in profits.
PEPE smart trader 1, transaction history. Source: Lookonchain
Second, the institutional investment firm BlockTower Capital sent $2.8 million worth of 202 billion PEPE to Cumberland, a known market maker that provides liquidity for institutional and retail trading. The transaction happened as the meme coin price broke through $0.000014 per token.
This was a six-day swing trade that earned BlockTower Capital $578,000 in profits on a $2.22 million investment.
BlockTower Capital <> Cumberland transaction history. Source: Lookonchain
Last, a smart trader deposited $2.83 million of PEPE to the Bybit crypto exchange as its third profitable trade. This trader is considered smart due to its 100% win rate trading PEPE, for an estimated total profit of $2.48 million.
PEPE smart trader 1, transaction history. Source: Lookonchain
FOMO: Retail and whales are still buying
Meanwhile, a few hours after the last activity, another whale withdrew $7.95 million in 592 billion PEPE from Binance. Lookonchain estimates this resulted from a two-day purchase during a notable price pump for the meme coin.
On May 19, Finbold reported another trader who lost $300,000 in two days of bad trading decisions with PEPE.
Moreover, Finbold gathered data from Santiment showing an increased social volume, indicating increased retail interest. Usually, these social indicators peak a few days before a trend reversal, as smart trader whales take profit over the FOMOing retail.
PEPE price vs. Social Volume. Source: Santiment’s Sanbase Pro / Vini Barbosa for Finbold
Meme coins and the Greater Fool Theory
Meme coins, such as PEPE, often lack fundamental value and are driven by hype and social media buzz. 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.”
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 be left holding worthless cryptocurrencies, leading to substantial financial losses.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
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