A memecoin trader on the Solana network lost approximately $147,000 in three days by making poor investment choices
Investing in memecoins has become one of the easiest ways for cryptocurrency traders and investors to turn a few thousand into millions. However, as a recent analysis by Lookonchain demonstrates, not everyone succeeds in the endeavor.
According to the data provider, a breakdown of investment choices made by a memecoin trader in the space of three days revealed that they lost 54 SOL (valued at approximately $147,000). Over the period under consideration, the trader invested in 11 different meme tokens but never had the patience required to turn their money profitable.
On other occasions, the analysis shows that the trader often succumbs to the fear of missing out, buying tokens when their prices are high and then selling when they are low. Overall, the unknown trader put in 3,160 SOL (approximately $628,840) but only made it out with 2406 SOL (approximately $478,794)
Memecoin Trading Requires Abundant Caution
Evidently, the biggest takeaway from the latest development is the need for abundant caution while trading or investing in memecoins. The mouthwatering gains often portrayed by fortunate investors do not necessarily reflect the outcome for everyone.
At the same time, the high volatility associated with the cryptocurrency space may require that investors maintain patience over relatively longer periods for their investment to turn profitable. For instance, one of the listed memecoins in the investor’s portfolio, IQ50, was recently airdropped to holders of NFTs associated with Solana’s recently announced Chapter 2 device. The airdropped token has also gained significantly, according to Gate.io data, even though the memecoin trader lost 109.55 SOL ($21,800) on this single trade.
In a nutshell, the frequently cited investment principle of putting in only what one can afford to lose can protect trades and investors from losing significant capital to memecoin speculation.
