A cryptocurrency trader has recently managed to make over $1.6 million by trading the Solana-based meme-inspired cryptocurrency Wen ($WEN) by buying it just after it opened for trading and selling it right after to realize their gains.
According to on-chain analysis service Lookonchain, the trader spent $125,500 worth of the USDC stablecoin to buy 20 billion WEN tokens as soon as they started trading, before selling 12.5 billion tokens for over $807,000, realizing a gain of $682,000 in the process. The trader is still holding onto 7.6 billion tokens worth over $900,000.
In just 14 hours, this trader made over $1.6M trading #MEME coin $WEN!😱
He spent 125.5K $USDC to buy 20B $WEN when $WEN opened trading, and sold 12.5B $WEN for 807K $USDC, realizing a profit of $682K.
And currently holds 7.6B $WEN($941K), with an unrealized profit of $941K. pic.twitter.com/0adU5BzGSv
— Lookonchain (@lookonchain) January 27, 2024
Users on the microblogging platform X (formerly known as Twitter) where Lookonchain shared their findings pointed out that this isn’t the norm in the cryptocurrency space, and suggested instead that these types of moves aren’t made by savvy traders, but rather by project insider taking advantage of their followers.
Notably, market data shows that the price of the meme-inspired cryptocurrency hit a peak of over $900 shortly after it started trading, but has since completely collapsed to now be trading at $0.00017 per token.
Its price action suggests that insiders planned a pump and dump scheme on the cryptocurrency. These illegal schemes boost the value of an asset through exaggerated or false statements about it, usually with insiders buying it so its price moves in a bid to leave other investors with a “fear of missing out.”
As these investors move in, the insiders dump their holdings on them. These schemes are seen in assets with micro or small market capitalizations and are relatively common in the cryptocurrency space.