Anonymous trader turns $368 into $2 million in three days 
Cryptocurrency Oct 2, 2024 Share
An anonymous cryptocurrency trader turned a $368 initial purchase into $2 million of unrealized gains in just three days. Commentators on X speculate on a possible insider trading activity, although nothing is confirmed.
In particular, the trade occurred with the meme coin HIPPO on the Sui network against its native token, SUI. According to a Lookonchain report on October 2, the “guy” made approximately $2 million in three days.
First, on September 28, the anonymous trader spent $368 worth of 198 SUI to buy 253.5 million of HIPPO. The “guy” then sold 119.6 million HIPPO for $325,000 worth of 175,000 SUI, partially realizing his gains.
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By the time of the original post, the meme coin was trading at $0.012, with 133.9 million HIPPO behind, worth approximately $1.7 million. However, the HIPPO/SUI pair on Cetus’s decentralized exchange is already up, touching the price resistance at nearly $0.014.
HIPPO/SUI on Cetus. Source: Dexscreener / Finbold
Concerns about Sui’s tokenomics
Sui has recently grown to the 20th position in terms of market cap with a $5 billion capitalization. Yet, its fully diluted value (FDV) is far higher than that, considering only 27.6% of all SUI’s supply is circulating.
Thus, the cryptocurrency has an impending 72.4% inflation that will inevitably reach the market, creating significant selling pressure.
Sui (SUI) market data. Source: CoinMarketCap / Finbold
Interestingly, most of these yet-to-circulate tokens are locked in vesting contracts in the control of Mysten Labs or private investors. In October, SUI unlocked over $100 million, as Finbold reported, raising concerns and criticisms.
Justin Bons classified SUI’s tokenomics as the result of “sheer greed,” as we published in May.
“SUI has a great design, except for its token economics: SUI claims to have a capped supply of 10B, with 52% being “unallocated” till 2030. The problem is that over 8B SUI is being staked right now! Over 84% of the staked supply is held by founders. To say this is gross is an understatement The sheer greed of SUI’s distribution is mindblowing”
– Justin Bons
Some market participants pointed out that the upcoming unlock explained why influencers and the crypto media suddenly started “pushing” SUI.
This is eye opening. Now I understand why $SUI has been pushed hard since 2 weeks by KOLs and lots of media.
Every single time. https://t.co/Eqa7kkebUI
— Gourmet (@cardano_gourmet) September 29, 2024
Moreover, cryptocurrency trader and investor Wazz warned of Sui’s model where these whales with locked tokens can still stake, and profit from the yet-not-circulating tokens pledged to them.
If you're holding any coin that allows for staking of locked tokens, you're getting scammed.
You think you're being smart buying before the unlocks vest, but in reality seed investors are dumping staking rewards non stop at 100x valuationshttps://t.co/hR9eegJZCZ
— Wazz (@WazzCrypto) October 2, 2024
Meme coin traders and the ‘Greater Fool Theory’
Cryptocurrencies are inherently volatile and present considerable risks for traders, investors, and users, even with solid and usable projects. However, trading meme coins adds another layer of risks, especially liquidity-related.
Furthermore, this asset class has characteristics that resemble financial bubbles, which can result in liquidity death spirals. The “Greater Fool Theory” explains the dynamics seen on meme coins. They are speculative tokens moved primarily by social hype and buzz without any organic demand.
Traders buy the token with the expectation that a “greater fool” will pay a higher price in the future. Nevertheless, the scheme fades away once there are no “greater fools” to continue fueling the price up, often facing liquidity issues and death spirals.