The $PUMP trade:

I’m expecting $10+ bil within the next week.

If you’re a VC or institutional sized trade, unless you’ve been net short the past year, Pumpfun was the primary reason traders realized alt’s with no products were extremely overvalued.

If you’ve traded memes the past year, unless you’re in the top 1% then you’ve probably lost a significant amount of money as well.

We all tell ourselves we have no emotional bias when trading although that couldn’t be further from the truth in crypto.

Animal spirits and cults around projects/eco’s are what generate the unfathomable returns. Main characters are built off an underdog picking a niche sector and bullposting like their familys life depends on it.

Meaning if everyone underwrites a trade with negative emotion, positioning is extremely light. As price trades higher and traders come to their senses, there’s excess sidelined capital and more importantly, their ego telling them they’re wrong.

Whether you like it or not, $PUMP is the best expression for hyper degenerate gambling. Just as $HYPE is the best expression for increased momentum in markets.

Structuring the trade

With Pump trading at 5 bil with spot just going live, majority of traders are either;

1. Not fully allocated, they’ve taken an entry position in pre market (breakeven) and waited for the ICO to sell out before increasing size.

2. Hedging against their private round investments, meaning as confidence grows with the ICO being filled, expect large amounts of delta hedging to be unwound.

A large amount of traders were sidelined from the ICO round due to exchanges probably creating a deal with Alon to refund everyone, causing even more fomo.

Spot trading will now create more reliable demand and reduced OI, traders will see longer term inflows and will become a stronger signal of direction.

Taking these points into consideration, the negative emotional bias and OTHERS/BTC bottoming out. This has the potential to be one of the kingmaker trades of Q3/Q4.

Valuations

While P/E doesn’t matter as much in crypto due to markets being shorter term and annual revenue is a meme, even still it’s good to consider for valuations.

Doing some napkin math we can see Pump trades at a ~6.6x P/E at 4 bil FDV.

$HYPE currently trades at ~76.6x P/E at 45 billion FDV.

When HYPE initially launched they had a circulating mcap of $1.3 bil with 33% circulating (the same as what pump is launching with).

PUMP will be launching with approx $700 mi in lifetime revenue, whereas HYPE only accumulated approx $96 mil in revenue before they launched.

Pump has zero buybacks and will only give 25% of revenue to stakers.

Final thoughts

I’ve seen a lot of posts saying you can’t compare PUMP to HYPE, well they’re the only two products launching with 9 figs of revenue so what else are you meant to compare it with?

The Pump fud stems from its ability to remain relevant. For myself, Pump feels like the Opensea of this cycle, holding staying power for multiple years or even the next 6 months feels like a much bigger risk than perps trading.

Purely down to optics, already proven success, $700 mil revenue, $1.3 bil raised, even if memecoins fizzle out over the coming several months, Pump has been the most successful and innovative app for how market dynamics work in our space.

Even without any buybacks, it’s the strongest expression for being long hyper degenerate gambling in a time period where dollars are losing value and casino’s are people’s best chances at making something for themselves.

$10 bil seems like a very reachable number in the near future.