finbold.com
The Solana ecosystem has been consolidating itself as a profitable environment for ‘smart traders’ and lucky speculators. Following this trend, a trader invested $35,000 worth of Solana (SOL) to buy a meme coin stash now worth over $10 million.
Notably, the Solana account ‘5We8d…qP5GY’ purchased 4.41 billion of a token called “cat in a dogs world” (MEW).
For that, the trader spent 178.2 SOL, worth $35,000 when Lookonchain reported the accomplishment on X (formerly Twitter). This purchase happened on March 26, at 5:23 am (UTC) and Lookonchain posted at 7:16 am (UTC).
At that time, MEW was priced at $0.002023 on Raydium (RAY), a popular decentralized exchange running on Solana. Finbold listed Raydium as one of the most promising projects in Solana’s ecosystem to watch for 2024.
MEW price analysis and a $10 billion worth Solana trade
As of writing, the Solana trader’s position has already surpassed the $10 billion of unrealized profit with this trade. MEW is currently priced at $0.002688 according to the CoinGecko index, for a $203.57 million market cap.
Interestingly, the 24-hour trading volume of the token is at $155.48 million. This suggests the trader may face liquidity challenges while trying to realize his millionaire profits. On that note, any meaningful sale could negatively impact the token’s price and erase the account’s gains.
Caution warning while trading meme coins
One of the most significant risks of trading meme coins is related to liquidity, which increases in recently created tokens.
Sometimes, the exchange rate of an asset may rise exponentially in a low liquidity environment. This gives the impression of huge gains in a successful trade.
However, the gains are only accrued when realized throughout the selling for a consolidated asset like SOL or stablecoins. Essentially, the huge volatility that drove the price upward can similarly occur in the opposite direction, erasing the unrealized gains.
The Solana trading ecosystem is still maturing, which creates both massive opportunities and threats for traders. Therefore, anyone speculating in this landscape must act cautiously and have a clear entry and exit strategy.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.