CoinDesk Analysis Team
CoinDesk
Crypto traders are paying through the roof to get in early on newly-issued meme coins and rack up a large percentage of the supply.
On-chain data shows a trader paid over 64 ether (ETH) in fees on Monday to get 84 ether worth of four (FOUR), a newly-issued meme token on the Ethereum blockchain likely based on the Crypto Twitter meme of “4.”
This means that the trader spent over $120,000 to get $156,000 worth of FOUR tokens. However, some sleuths pointed out that the trader was only the second entity to buy FOUR – and is now sitting on an unrealized profit of nearly $240,000.
Somebody paid 64 ETH ($120k) in fees to withdraw 84 ETH ($156k)
— MinisterOfNFTs (@MinisterOfNFTs) May 8, 2023
this is memecoin season pic.twitter.com/TaC9mkXmLY
Data from DEXTools show FOUR tokens have seen $136 million in trading volumes on the first day of trading and have a market capitalization of $30 million as of Tuesday.
As such, further on-chain data shows the top early FOUR buyers are sitting on profits of $240,000 to $2 million – suggesting why traders were ready to pay outrageously large amounts in fees to purchase the tokens.
The current hot ball of money in crypto is hunting for jokes instead of fundamental plays, which has contributed toward extremely large gas fees on the Ethereum blockchain.
Gas refers to ether paid by Ethereum users to ensure their transactions are included in the earliest block by network validators. These validators are incentivized to include transactions that pay the highest fees instead of a first-come-first-serve basis – meaning fees on popular tokens can often run to thousands of dollars.
All writers’ opinions are their own and do not constitute financial advice in any way whatsoever. Nothing published by CoinDesk constitutes an investment recommendation, nor should any data or Content published by CoinDesk be relied upon for any investment activities. CoinDesk strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions.
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