- A trader turned $17 worth of a squirrel-themed memecoin into $3 million.
- They benefitted from a Binance listing, but could have done even better.
A memecoin trader just pulled off the trade of a lifetime.
On October 31, an anonymous trader bought $17 worth of Pnut, a memecoin named after a celebrity squirrel.
On Wednesday, the trader finished swapping those tokens for an estimated $3 million in Solana, the native cryptocurrency of the eponymous blockchain.
Pnut’s creator, on the other hand, didn’t fare as well.
After spending about $335 in Solana to create 1 billion Pnut tokens on October 31, the anonymous developer cashed out just two minutes later, swapping their allotment of 63.9 million Pnut for about $620 in Solana — a profit of roughly $300.
Those tokens would have been worth more than $155,000,000 when Pnut peaked Wednesday night.
The trader’s 16,470,500% increase is one of the more astonishing examples of crypto enthusiasts successfully playing the memecoin lottery.
Unlike most other crypto tokens, which are ostensibly tied to something of value, memecoins are defiantly useless, trading on nothing but hype.
Tens of thousands of memecoins are created each day on Pump.Fun, a Solana-based tool that removes technical barriers to developing the tokens.
They’re often named after a trending internet phenomenon, like P’Nut, the pet squirrel recently euthanised by officials in New York state.
When he was seized on October 30 — owning wild animals is illegal in New York — P’Nut bit a wildlife biologist, and had to be tested for rabies. The rabies test can only be done on dead animals.
P’Nut took social media by storm, becoming a symbol of government overreach and a cause celebre among some right-wing influencers, including tech tycoon Elon Musk.
Investors often buy a newly launched memecoin for a pittance in hopes the token will go viral, draw new buyers, and jump in value.
That’s exactly what happened with Peanut the Squirrel (ticker: Pnut).
When the trader bought Pnut on Pump.Fun, it was worth less than a thousandth of a penny.
By November 2, each Pnut was worth 7 cents. The trader could have cashed out for more than $150,000. But they waited.
By Monday, November 11, it was worth more than 40 cents. On Raydium, a decentralised exchange on the Solana blockchain, the trader started swapping Pnut tokens for Solana tokens, 4,773 Pnut every three minutes.
Memecoins are volatile, and swapping memecoins for a more established cryptocurrency is a way to lock in profits before a potential collapse.
But the trader stopped swapping after about five hours. All told, they had swapped fewer than 500,000 Pnut tokens, about one-fifth of their stash. They waited some more.
On Tuesday night, just after 10 pm New York time, each Pnut token was worth 69 cents, and the trader started swapping again. This time, they wouldn’t stop.
The trader’s timing was impeccable: One hour after they started swapping, Binance, the world’s largest crypto exchange, said it would list Pnut, making the token available to the vast majority of would-be investors, who lack the know-how required to purchase memecoins on the decentralised exchanges where they first appear.
Just after 2 pm New York time on Wednesday, the trader made their final swap. At that point, Pnut was trading at $1.50.
About a half hour later, the trader transferred 13,459 Solana tokens, worth about $2.9 million, to another crypto wallet, where they remain.
Just before midnight New York time, Pnut was trading at $2.44. Had the trader waited even long, they could have sold their tokens for almost $6 million.
In the risky world of crypto, memecoins are especially volatile due to the relative ease with which creators or well-heeled traders can manipulate their price, and their propensity to trade on hype, rather than fundamental value.
With a few notable exceptions, traders rarely manage to turn a profit.
Whether the newly minted millionaire can repeat their Pnut feat remains to be seen. As of Thursday, they held 262 different tokens, including 1.8 million Skittles tokens, 2.3 million UFO tokens, and 1.1 million of a different Peanut the Squirrel token.
The combined market value of all 262 tokens? A mere $99,000.
Aleks Gilbert is a DeFi correspondent based in New York. Have a tip? Contact him at aleks@dlnews.com.
