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Highlights
- Pump.fun repurchased $2.3M in $PUMP tokens to stabilize the price.
- $PUMP's FDV stands at $5.97B after raising $1.32B in meme coin sale.
- Critics warn $PUMP could face volatility due to no governance or active role.
Pump.fun has initiated a buyback of its $PUMP token, purchasing approximately $2.3 million worth of tokens in the past 20 minutes.
Pump.fun Buyback Details and Purpose
The move by Pump.fun to repurchase tokens of its $PUMP coin comes after one of the largest sales of meme coins on Solana, which sold 33% of the 1 trillion total supply of its token at $0.004 per token. The $PUMP sale generated $1.32 billion and pegged the fully-diluted valuation (FDV) of the token at $5.97 billion.
However, according to an X post, the project used its fee wallet to fund the buyback wallet, which was seen as a serious intention to stabilize the price of the token.
The buyback, which took place in a narrow 20-minute time interval, can be interpreted as an attempt to adjust to the market situation and fluctuations in the token price. Nevertheless, even with the buyback, the $PUMP token has been criticized from the challenges of its non-utility and possibility to become volatile in the long-run affecting the price thereof.
Criticism of the $PUMP Token
The recent buyback comes amid growing skepticism surrounding the $PUMP token’s fundamental value. A report by BitMart Research points out the token’s lack of real utility despite the $PUMP price rising premarket.
In contrast to other cryptocurrencies, $PUMP does not grant governance rights, party rights with regard to revenue, nor does it have an active role on the platform, other than to market the brand name of the Pump.fun site which has cast some doubt on its capacity to hold its value.
The sale of Pump.fun has had a mixed reaction. Despite the success of the sale, other industry players, such as IncomeSharks, have also had their doubts concerning the possible future of the token. IncomeSharks said,
“It means something bad when they start selling their own token as no one is interested in it anymore.”
In addition, although Pump.fun had experienced success earlier, it has been losing its market share and activity, which may indicate difficulties in sustaining its user base and ensuring regular demand of the token.
$PUMP Price Soars 13% Despite Backlash
Following the buyback, the $PUMP token saw a significant increase in trading volume, with a 13.11% rise in the past 24 hours. The token’s market cap now stands at $2.11 billion, up by 13.11%. Although these numbers show promising trends, the long-term sustainability of the token is questionable.
Analysts have noted that although buybacks can provide temporary relief, they would not solve the concerns of utility and interest of the market.
This rise in price may be short-lived and the project will have to address its underlying concerns to retain investor confidence. However, with top crypto exchange like Coinbase supporting $PUMP token, the price may continue to see renewed interest despite the 4% decline in the last 7 days.
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