Crypto investors are shelling out large sums of money to pay transaction fees in order to receive newly issued memecoins with high profit expectations. However, with their extreme volatility, experts are warning the community about the risks of memecoins despite their potential for quick profits.
On-chain data shows that one trader paid over 64 ETH in gas fees to receive a number of FOUR memecoins worth 84 ETH. FOUR is a new memecoin launched on the Ethereum blockchain, inspired by a popular Twitter meme about the number 4.
Sick volume ✅ @CoinMarketCap listing ✅ @coingecko listing ✅
All liquidity is already burned 🔥 or locked 🔒Always $FOUR pic.twitter.com/GbIfm0S1UF
— FourCoin (@4thecoin) May 8, 2023
This means that the investor spent over $120,000 in gas fees to buy FOUR worth $156,000. However, some members of the community believe that this person has made a profit of $240,000.
According to DEXTools data, FOUR’s trading volume reached $136 million on its first day of launch. The memecoin’s market capitalization also reached $30 million on May 9th.
Those who bought FOUR at the time of its launch have already made profits ranging from $240,000 to $2 million. This is also the reason why investors are willing to spend a large amount of money to pay gas fees when buying memecoins.
fam i’ll explain what happened in your screenshot so nft influencers aren’t made fun of later like bitboy is now
a sniper paid 64 eth in tx fees to speed up his transaction and be the second buy on $four
13.7 billion $four is now worth 281e
281 – (64 +84) = 133 eth profit 💰 pic.twitter.com/9hbp8JTQYd
— Flur (@FlurETH) May 8, 2023
The memecoin frenzy in recent days has pushed transaction fees on the Bitcoin and Ethereum networks to record highs. As AZCoin News reported, gas fees on Ethereum reached their highest level in two years and show no signs of cooling down. In addition, the explosion of BRC-20 has also caused transaction fees on Bitcoin to skyrocket.
On May 3rd, the total transaction fees on the Bitcoin network reached $3.5 million, an increase of about 400% compared to the end of April. According to data from YCharts, the average transaction fee on this blockchain network also reached $19.21.
The high demand for transactions has caused the Bitcoin network to be congested for many hours. This situation has led to Binance announcing the suspension of BTC trading twice in the past few days.
In summary, the excitement surrounding memecoins has led to a surge in transaction fees on the major blockchain networks. While the potential for quick profits may be enticing, investors should be aware of the risks and exercise caution when investing in such volatile assets.
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