Child Streamer’s $30K Crypto Rug Pull Highlights Harsh Reality of 1.7% Memecoin Graduations

• A young memecoin creator pocketed $30,000 after engaging in a rug pull.
• The news has caused some to question the danger of chasing the get-rich-quick culture of memecoins.
• Pump.fun, a popular site for memecoins, makes an average of $16 million every month.
• Only a small percentage of memecoin traders on pump.fun have made a significant amount of money.

An apparent 13-year-old Solana (SOL) memecoin creator, who bagged $30,000 through a rug-pull stunt on livestream, has caused some to reflect on the industry’s dangerous obsession with non-starter coins.

Memecoin rug pulls, an issue growing in the crypto space, involve developers creating hyped tokens, driving up their value through marketing or fake promises, and then disappearing with investors’ funds.

With 2.44 million tokens created in total on pump.fun and only 1.7%, or 41,540 tokens, “graduating,” some traders have begun to discuss how bad their odds truly are and have spoken out against the culture of gambling lots of cash.

Teenage Rug Pulls

In the early hours of Wednesday morning, a teenager launched a token called Gen Z Quant on the popular memecoin platform pump.fun.

As the token began to rally, the young creator sold a significant portion of his investment, causing the memecoin’s price to plummet.

After pocketing $30,000, the teenager stuck his fingers up at everyone watching the live stream, stating: “Thanks for the 20 bandos.”

However, instead of counting their losses and learning from their mistakes, the crypto industry decided to get revenge on the teen by pumping more money into Quant.

The token rapidly rose to a market cap of $85 million, meaning that if the teen had held, his $30,000 would have been worth a whopping $4 million.

The teenager then created another token called I’m Sorry (SORRY ), which quickly hit a $4.5 million market cap after he sold again at the $400,000 level, pocketing a further $13,000.

Then, for a third time, the 13-year-old made a token based on his dog called LUCY . That coin hit a $3.8 million market cap after he sold his supply for $20,000 at the $700,000 mark.

These constant rug pulls caught the attention of some commentators, with some calling out the dangerous culture of continuing to throw a lot of money into coins that were obviously not going anywhere.

“I think it just shows how nihilistic people are where finance has become synonymous with just pure gambling and like being dumb is actually celebrated,” said YouTube scam investigator Coffeezilla.

“Getting rug pulled is celebrated.”

Memecoins are Tough

The 13-year-old’s antics and the subsequent response from some traders brought into focus the wider dangers of memecoin culture.

Rug pulls exploit the fear of missing out, particularly among inexperienced investors drawn to the allure of getting rich quickly.

Dogecoin (DOGE) is one of the most successful examples. It started as a joke in 2013 but skyrocketed in value during the 2021 crypto bull run.

Early adopters who purchased DOGE for fractions of a cent saw life-changing returns when it peaked at $0.73, making millionaires out of some investors.

However, the statistics of successful memecoins paint a very different picture.

Out of the 2.44 million tokens created on pump.fun, only 1.7% (41,540 tokens) graduated and just two tokens achieved a $500 million market cap (0.00008%), according to a report from hedge fund Syncracy.

In terms of trader profitability, only 76,587 wallets (3.1%) made at least $1,000, 11,936 wallets (0.4%) made $10,000, 924 wallets (0.03%) made $100,000, 70 wallets (0.002%) made $1 million, and only six wallets (0.0002%) made $10 million.

While less than 5% of traders are reaping the benefits, pump.fun is enjoying the trading. In July, the site saw a record value of $27.8 million and averages around $16 million every month.

When viewed through these statistics, the chance of earning “generational wealth” as a memecoin trader becomes worryingly low.

The Age of Rug Pulls

Some YouTubers have faced backlash for running pump-and-dump schemes.

This is where influencers promote specific tokens to their audience, artificially inflating the price. Once the price rises due to the influx of investors, the promoters sell off their holdings at a profit, causing the token’s value to plummet.

In 2021, popular influencers from the FaZe Clan YouTube group promoted what they called a charity-driven project token to their viewers.

Shortly after launch, the token’s value plummeted when the developers abandoned it, leading to accusations of a rug pull.

An investigation from Coffeezilla on YouTube revealed that several influencers had sold their tokens immediately after launch, benefiting from the spike in price created by their promotional efforts.

When these ventures fail, fans and investors are left bearing the financial losses while influencers claim ignorance or shift blame.

“I think memes are funny. I get it. But I just think memes, plus your actual finances, is not that funny,” Coffeezilla said.