With renewed optimism in the cryptocurrency market, traders have jumped again into meme coin speculation driven by the fear of missing out (FOMO). As a cautionary tale, a crypto trader just lost nearly $900,000 worth of Solana (SOL) in this player-vs-player game.
On August 8, Lookonchain urged investors to “please don’t FOMO buy meme coins” while reporting these millionaire four-hour losses. This particular token was Restore The Republic (RTR), with a political bias in anticipation of the U.S. presidential election.
As reported, the anonymous trader bought 7.2 million RTR with 5,800 SOL, worth $916,400. This purchase happened at the meme coin’s highest price, indicating a fear of missing out that backfired.
Four hours later, RTR crashed, forcing the trader out of their position, capitulating for 113.3 SOL, worth $18,000. With that, $898,500 vanished from this speculator’s wealth, distributed to the ecosystem after an emotional play, according to Lookonchain.
Political and celebrity meme coins
The rise and popularity of meme coins marked 2023 and 2024 crypto bull rallies, getting traders’ attention and money. These cryptocurrencies are known for not having a clear value proposition, simply representing an idea or internet meme.
In particular, political and celebrity-themed tokens made the most success among speculators, moving billions of dollars in decentralized exchanges (DEX). From Donald Trump to Iggy Azalea and Andrew Tate-related tokens, crypto traders won and lost capital following FOMO from one speculation to another.
Experts usually relate meme coins to the “Greater Fool Theory,” which studies the rise and fall of financial bubbles. According to the theory, people who buy into overvalued assets can still profit from “greater fools” who buy after them. At one point, however, new buyers will become scarce, leading to aggressive crashes like seeing with RTR.
Thus, cryptocurrency traders and investors should avoid becoming the greater fool by investing in buzz-driven assets and favor solid fundamentals instead.