Markets

Only 0.76% of pump.fun wallets made $1,000 or more: CN research

Published

3 months ago

August 26, 2024

In 2024, the Solana blockchain experienced a rapid expansion in the memecoin market, with pump.fun being at the forefront. The platform captured a massive audience seeking quick profits. Crypto.news conducted an in-depth analysis of the profitability of investing in pump.fun tokens, revealing that while a few early adopters managed to secure profits, the majority of investors ultimately lost money.

Pump.fun is the leader in Solana’s memecoin ecosystem and holds 50% of the market share. It achieved this by streamlining token launches and making them both quick and easy. It also focused on ensuring a fair process for creating and trading tokens, avoiding problems like presales or team allocations.

Only 0.76% of pump.fun wallets made $1,000 or more: CN research - 1

Pump.fun operates as follows:

Users pick a meme coin they like.
They buy the coin through a bonding curve.
They can sell the coin anytime to either secure a profit or cut a loss.
If the token’s market cap hits $69,000, $12,000 of liquidity is locked into Raydium, a decentralized exchange on Solana, and then burned.

Using various queries and scripts inspired by Dune analysts @adam_tehc, @hashed_official, and @evelyn233, we developed our own versions that allowed us to gather data for this article.

Due to the ease of use and the rise in popularity, around 300,000 tokens have been created on Solana each month since March 2024. However, not all of these tokens even reach a market cap of $69,000. Over six months, 33,683 tokens made it to Raydium, while a total of 1,883,578 tokens were deployed on pump.fun. This results in a graduation success rate of only 1.79%.

The statistics for investors on the pump.fun platform paints an even grimmer picture. Out of 29,601,462 total wallets involved, a majority experienced negative outcomes:

17,725,908 wallets (59.9%) recorded negative Profit and Loss (PNL). 89% of those wallets realized losses, locking in their negative returns by selling at a loss.
On the other hand, 11,126,772 wallets (37.6%) reported positive PNL, with 98% of these realizing actual gains.

Only 0.76% of pump.fun wallets made $1,000 or more: CN research - 2

The distribution of profits further shows the low probability of winning through memecoin investments. To provide a clearer picture of the probabilities associated with different profit levels on pump.fun, here are some realistic comparisons:

+$100 profit (6.47% chance): Less likely than being accepted into Harvard as an early applicant (7.8% in 2021).
+$1,000 profit (0.76% chance): Similar to the probability of having twins, which is around 0.4%.
+$10,000 profit (0.046% chance): Less likely than becoming a NASA astronaut (0.055%).
+$100,000 profit (0.0033% chance): Less likely than being struck by lightning in a lifetime (about 0.00653%).
+$1,000,000 profit (0.000540% chance): Comparable to the chance of being killed by a meteorite impact (approximately 0.0004%).
+$10,000,000 profit (0.000132% chance): Similar to the odds of flipping a coin and getting the same side 20 times in a row.

Many individuals are searching for a quick way to transform their financial situations, inspired by stories of random people making huge profits overnight. Unfortunately, the harsh reality is that most will lose, often catastrophically. Instead of gambling on unproven tokens, investors should focus on assets like BTC, ETH, and SOL — assets with a proven track record. These won’t turn $100 into a million tomorrow, but they will grow an individual’s wealth steadily and sustainably. At the end of the day, investing is for making money and not losing. The sooner one abandons the dream of instant riches and embraces this truth, the sooner they’ll start making decisions that truly increase their net worth. Anything else is a reckless path to financial ruin.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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Altcoin

Bitcoin Cash eyes 18% rally

Published

6 hours ago

November 22, 2024

admin

Bitcoin Cash (BCH) added nearly 35% to its value in the past month and rallied 12% on Nov. 21. Bitcoin’s (BTC) observed a rally to $98,384 early on Nov. 21, with BCH and other top cryptocurrencies tagging along for the ride.

An analysis of on-chain and technical indicators and data from the derivatives market shows that BCH could extend gains and retest its mid-April 2024 peak of $569.10.

Bitcoin hits all-time high, fork from 2017 ignites hope for traders

Bitcoin hit a record high of $98,384 on Nov. 21, a key milestone as the cryptocurrency eyes a run to the $100,000 target. BTC was forked in 2017, creating a spin-off or alternative, Bitcoin Cash.

BCH hit a peak of $1,650 in May 2021. Since April 2024, BCH has been consolidating with no clear trend formation.

BCH price rallied nearly 30% since Nov. 15, on-chain indicators show that further rally is likely in the Bitcoin spin-off token.

Bitcoin Cash’s active addresses have climbed consistently since August 2024. Santiment data shows an uptrend in active addresses, meaning BCH traders have sustained demand for the token, supporting a bullish thesis for the cryptocurrency.

The ratio of daily on-chain transaction volume in profit to loss exceeds 2, is 2.141 on Thursday. BCH traded on-chain noted twice as many profitable transactions on the day, as the ones where losses were incurred. This is another key metric that paints a bullish picture for the token forked from Bitcoin.

Binance funding rate is positive since Nov. 10. In the past eleven days, traders have been optimistic about gains in BCH price, according to Santiment data.

Chart of the week: Bitcoin Cash eyes double-digit rally, bullish indicators point to gains in BCH - 1 — BCH price vs. active addresses, binance funding rate, ratio of daily on-chain transaction volume in profit to loss | Source: Santiment

The network realized profit/loss metric identifies the net gain or loss of all traders who traded the token within a 24 hour period. NPL metric for Bitcoin Cash shows traders have been taking profits on their holdings, small positive spikes on the daily price chart represent NPL.

Investors need to keep their eyes peeled for significant movements in NPL, large positive spikes imply heavy profit-taking activities that could increase selling pressure across exchange platforms.

84.48% of Bitcoin Cash’s supply is currently profitable, as of Nov. 21. This metric helps traders consider the likelihood of high profit-taking or exits from existing BCH holders, to time an entry/ exit in spot market trades.

Chart of the week: Bitcoin Cash eyes double-digit rally, bullish indicators point to gains in BCH - 2 — BCH price vs. network realized profit/loss, percent of total supply in profit | Source: Santiment

Derivatives traders are bullish on BCH

Derivatives market data from Coinglass shows a 33% increase in open interest in Bitcoin Cash. Open interest represents the total number of active contracts that haven’t been settled, representing demand for the BCH token among derivatives traders.

Derivatives trade volume climbed 613% in the same timeframe, to $2.35 billion. Across exchanges, Binance and OKX, the long/short ratio is above 1, closer to 2, meaning traders remain bullish on BCH and expect prices to rally.

Chart of the week: Bitcoin Cash eyes double-digit rally, bullish indicators point to gains in BCH - 3 — Bitcoin Cash derivatives data analysis | Source: Coinglass

BCH futures open interest chart shows a steady increase in the metric, alongside BCH price gain since November 5, 2024. Open interest climbed from $190.74 million to $254.87 million between November 5 and 21.

Chart of the week: Bitcoin Cash eyes double-digit rally, bullish indicators point to gains in BCH - 4 — BCH futures open interest | Source: Coinglass

Technical indicators show BCH could gain 18%

The BCH/USDT daily price chart on Tradingview.com shows that the token remains within the consolidation. The token is stuck within a range from $272.70 to $568.20. BCH could attempt to break past the upper boundary of the range, a daily candlestick close above $568.20 could confirm the bullish breakout.

The April 2024 high of $719.50 is the next major resistance for BCH and the second key level is at $805.80, a key level from May 2021.

The relative strength index reads 64, well below the “overvalued” zone above 70. RSI supports a bullish thesis for BCH. Another key momentum indicator, moving average convergence divergence flashes green histogram bars above the neutral line. This means BCH price trend has an underlying positive momentum.

The awesome oscillator is in agreement with the findings of RSI and MACD, all three technical indicators point at likelihood of gains.

Chart of the week: Bitcoin Cash eyes double-digit rally, bullish indicators point to gains in BCH - 5 — BCH/USDT daily price chart | Source: Crypto.news

A failure to close above the upper boundary of the range could invalidate the bullish thesis. BCH could find support at the midpoint of the range at $419.90 and the 50-day exponential moving average at $388.50.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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Bitcoin Magazine Pro

The Bitcoin Pi Cycle Top Indicator: How to Accurately Time Market Cycle Peaks

Published

9 hours ago

November 22, 2024

admin

The Bitcoin Pi Cycle Top Indicator has gained legendary status in the Bitcoin community for its uncanny accuracy in identifying market cycle peaks. Historically, it has timed every single Bitcoin cycle high with remarkable precision—often within just three days. Could it work its magic again this cycle? Let’s dive deeper into how it works and its significance in navigating Bitcoin’s market cycles.

*View the Pi Cycle Top Indicator Chart Here.*

What is the Pi Cycle Top Indicator?

The Pi Cycle Top Indicator is a tool designed to identify Bitcoin’s market cycle tops. Created by Philip Swift, Managing Director of Bitcoin Magazine Pro in April 2019, this indicator uses a combination of two moving averages to forecast cycle highs:

111-Day Moving Average (111DMA): Represents the shorter-term price trend.
350-Day Moving Average x 2 (350DMA x 2): A multiple of the 350DMA, which captures longer-term trends.

When the 111DMA rises sharply and crosses above the 350DMA x 2, it historically coincides with Bitcoin’s market cycle peak.

The Mathematics Behind the Name

Interestingly, the ratio of 350 to 111 equals approximately 3.153—remarkably close to Pi (3.142). This mathematical quirk gives the indicator its name and highlights the cyclical nature of Bitcoin’s price action over time.

Why Has It Been So Accurate?

The Pi Cycle Top Indicator has been effective in predicting the peaks of Bitcoin’s three most recent market cycles. Its ability to pinpoint the absolute tops reflects Bitcoin’s historically predictable cycles during its adoption growth phase. The indicator essentially captures the point where the market becomes overheated, as reflected by the steep rise of the 111DMA surpassing the 350DMA x 2.

How Can Investors Use This Indicator?

For investors, the Pi Cycle Top Indicator serves as a warning sign that the market may be approaching unsustainable levels. Historically, when the indicator flashes, it has been advantageous to sell Bitcoin near the top of the market cycle. This makes it a valuable tool for those seeking to maximize gains and minimize losses.

However, as Bitcoin matures and integrates further into the global financial system—bolstered by developments like Bitcoin ETFs and institutional adoption—the effectiveness of this indicator may diminish. It remains most relevant during Bitcoin’s early adoption phase.

A Glimpse Into the Future

The big question now is: will the Pi Cycle Top Indicator remain accurate in this cycle? With Bitcoin entering a new era of adoption and market dynamics, its cyclical patterns may evolve. Yet, this tool has proven its worth repeatedly over Bitcoin’s first 15 years, offering investors a reliable gauge of market tops.

Final Thoughts

The Pi Cycle Top Indicator is a testament to Bitcoin’s cyclical nature and the power of mathematical models in understanding its price behavior. While its past accuracy has been unparalleled, only time will tell if it can once again predict Bitcoin’s next market cycle peak. For now, it remains an indispensable tool for those navigating the thrilling highs and lows of Bitcoin.

Explore the full chart and stay informed.

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$100

Bitcoin Nears $100,000 As Trump Council Expected To Implement BTC Reserve

Published

17 hours ago

November 22, 2024

admin

What an enormous day it has been today.

Gary Gensler officially announced that he is stepping down from his position as Chairman of the Securities and Exchange Commission (SEC), and minutes later, Reuters reported that Donald Trump’s “crypto council” is expected to “establish Trump’s promised bitcoin reserve.” A bitcoin reserve, that would see the United States purchase 200,000 bitcoin per year, for five years until it has bought 1,000,000 bitcoin.

Right after both of those, Bitcoin continued its upward momentum and broke $99,000, with $100,000 feeling like it can happen at any second now.

It is hard to contain my bullishness thinking about the United States purchasing 200,000 BTC per year. They essentially have to compete with everyone else in the world who is also accumulating bitcoin and attempting to front run them. There are only 21 million bitcoin and that is a LOT of demand.

To put this into context, so far this year the US spot bitcoin ETFs have accumulated a combined total of over 1 million BTC. At the time of launch the price was ~$44,000 and now bitcoin is practically at $100,000. And that’s all ETFs combined. Imagine what will happen when just one entity wants to buy a total of 1 million coins, having to compete with everyone else accumulating large amounts as well?

I mean MicroStrategy literally just completed another $3 BILLION raise to buy more bitcoin, and will continue raising until it purchases $42 billion more in bitcoin. The United States are most likely going to be purchasing their coins (if this legislation is officially signed into law) at very high prices. The demand is insane and only rising in the foreseeable future.

With two months left to go until Trump officially takes office, it remains to be seen if this bill becomes law, but at the moment things are looking really good. As Senator Cynthia Lummis stated, “This is our Louisiana Purchase moment!” and would be an absolutely historic moment for Bitcoin, Bitcoiners, and the future financial dominance of the United States of America.

This is the solution.
This is the answer.
This is our Louisiana Purchase moment!#Bitcoin2024 pic.twitter.com/RNEiLaB16U
— Senator Cynthia Lummis (@SenLummis) July 27, 2024