A cryptocurrency trader has turned a modest $3,000 investment into a staggering $2 million in a matter of hours, fueled by a memecoin surge triggered by Binance co-founder Changpeng "CZ" Zhao's social media activity. The lucky trader, identified by the wallet address "0x872," made an early bet on the newly launched memecoin "4" ($4) on the BNB Chain.
Blockchain data indicates that the trader's initial investment of 3 BNB, worth approximately $3,060, was used to purchase 16.86 million units of the "4" token. Following CZ's post on X (formerly Twitter), the token's value skyrocketed, pushing the trader's holdings to nearly $2 million.
According to Lookonchain, a blockchain analytics platform, the trader capitalized on the price surge by strategically selling 5.12 million "4" tokens for 110 BNB, equivalent to roughly $118,700. Despite this substantial profit-taking, the trader retained 11.75 million "4" tokens, still valued at approximately $1.88 million. This represents an impressive 652x return on the initial investment.
The "4" token emerged in the wake of a phishing attack on the BNB Chain. The hacker reportedly made a profit of only $4,000 before the crypto community turned the event into a memecoin. This incident highlights the inherent risks and opportunities associated with memecoins, which are often driven by social buzz and community sentiment.
The trader's success underscores the potential for significant gains in the volatile world of memecoins. Data from CoinStats.app indicates that the trader's portfolio generated over $1.8 million in unrealized profit within a week, with over 98% of their assets held in the "4" token. Nansen's blockchain intelligence platform also reveals that "smart money" traders, known for their successful track record, were among the early buyers of the memecoin. The "4" memecoin was the third-most-bought token by these traders on the BNB Chain over the past 24 hours, with nearly $100,000 worth of tokens acquired.
The "4" token experienced a trading volume of $155 million within 24 hours, with over 79,000 transactions occurring on PancakeSwap. While buy and sell pressure remained balanced, the token's liquidity was relatively thin compared to established cryptocurrencies, contributing to its price volatility. The price of "4" reached a high of $0.22 before retracing to around $0.16.
The incident serves as a reminder of the highly speculative nature of memecoins. While stories of overnight riches are enticing, the reality is that most investors will not replicate such gains. The value of memecoins is often divorced from any intrinsic utility, driven instead by hype and social media trends. This makes them prone to sudden and dramatic price swings, posing a significant risk for those who invest without proper research and risk management.
Despite the risks, memecoins continue to attract retail traders seeking quick profits. The "4" token's rally highlights how capital and community enthusiasm can lead to parabolic gains in decentralized finance (DeFi) markets. As on-chain sleuths and traders closely monitor the market, they remain hopeful of spotting the next "lightning-in-a-bottle" opportunity.