Meme coin platform Pump.fun saw its $PUMP token jump 13.11% higher as the project launched a significant buyback program. Pump.fun bought back about $2.3 million in tokens in only 20 minutes, hoping to stabilize the price of the token and create a new interest in it.
This was after a massive sale where Pump.fun sold 33% of its 1 trillion token supply at a price of $0.004 each, raising a total of 1.32 billion dollars and the fully diluted market cap of the token to almost 6 billion dollars.
The buyback was financed by the project fee wallet, which is a serious indication of supporting the token value. Nevertheless, not all people are sure. IncomeSharks and other analysts and traders questioned the lack of practical use of $PUMP.
The token does not provide any governance rights or revenue sharing and does not serve any practical purpose other than marketing the Pump.fun platform. Critics believe that this low utility can cause long-term volatility and falling demand.
Nevertheless, the market cap of $PUMP increased to $2.11 billion despite the backlash. This unexpected surge in trading volume indicates investor interest; however, analysts caution that buybacks provide a short-term boost unless more fundamental problems are addressed.
Although the support of Coinbase can keep the momentum, the token has fallen by 4% in the last seven days, which is an indication of investor pessimism. The meme coin world is filled with hype. However, lacking good fundamentals, a buyback will not be enough to keep $PUMP pumping in the long term.
Also Read: New Meme Coin in Town: FARTCOIN Whales Moves to PUMP Token
