Pump.fun’s anticipated ICO of the PUMP token achieved remarkable success, raising US$500 million (AU$769.5 million) and selling out in just 12 minutes. However, an analysis by BitMEX reveals that nearly 60% of its initial investors have already divested or relocated their tokens to external platforms.
On-chain data indicates that out of 10,145 participating wallets in the ICO, 6,042, or 59.6%, have transferred their assets to centralised exchanges or other wallets. Conversely, 3,791 wallets (37.4%) are still retaining their PUMP tokens, while only 312 (3%) have increased their holdings since the token’s launch.
The presale set the token’s price at US$0.004 (AU$0.0062), projecting the project to a fully diluted valuation of US$4 billion (AU$6.16 billion). Once listed, PUMP debuted at approximately US$0.0056 (AU$0.0086), eventually reaching a peak of US$0.006812 (AU$0.0105). However, within 24 hours, it retraced to US$0.005468 (AU$0.0084), reflecting a significant decline of 19.1% from its highest point.
### Resilient Market Sentiment
Despite the recent sell-off, BitMEX highlighted an unexpected resilience in market sentiment surrounding PUMP. Positive funding rates suggest that bullish interest in the token persists, contrasting with typical patterns of declines and aggressive short selling that often accompany significant ICO unlocks.
Pump.fun, which operates on the Solana blockchain, has seen its user base expand to around 100,000 daily active users, and the platform reportedly generates an annual profit of US$540 million (AU$831 million). This brings PUMP’s price-to-earnings ratio to 9.6x.
Nevertheless, there’s growing concern over the token’s long-term valuation sustainability, particularly as its monthly trading volumes have significantly decreased from US$11.6 billion (AU$17.9 billion) in January to US$3.65 billion (AU$5.62 billion) in June. The rise of competitors and a dip in trading activity leads to uncertainty about whether the momentum behind PUMP can be maintained.
Overall, while initial excitement prompted a swift influx of funds into Pump.fun, ongoing usage patterns and emerging competition pose challenges for sustaining such a high valuation in the future.
