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Zhu Su, founder of the bankrupt cryptocurrency firm Three Arrows Capital, said in his latest statement that PumpFun’s PUMP token generation efficiency (TGE) was a key factor accelerating the rise in the price of Solana ($SOL).
Zhu Su is currently wanted by the US and is a fugitive. The collapse of Three Arrows Capital triggered a massive downturn in the cryptocurrency market.
Su stated that both market dynamics and investor behavior played a role in this rise. According to Su, the Pump.fun platform's lack of a large amount of $SOL does not exert downward pressure on the price, alleviating investor concerns about the risk of selling.
Su also stated that there's a misperception in the market: users buy $SOL with US dollars, trade on the platform, pay transaction fees with $SOL, and Pump.fun then converts these SOLs into dollars. He added that this structure is a classic consumer business model and won't directly cause a decrease in the price of $SOL.
PumpFun developers were in the news for frequently selling the large amounts of $SOL revenue they earned on the market.
Zhu Su also noted that the financial activity PumpFun has generated within the Solana ecosystem is noteworthy. Figures like the $106 million monthly revenue in November, which the founder said demonstrates Solana's strong performance and is attracting interest from both developers and investors.
According to Su, this not only fuels a surge in Solana-based projects but also fuels a renewed appreciation of $SOL as an investment vehicle. The fact that investors who participated in PumpFun's initial coin offering are redirecting their profits back into $SOL, Su believes, is another factor driving up the price by increasing demand within the ecosystem.
*This is not investment advice.