
Pump.Fun's $1 Billion Token Sale Raises Liquidity Concerns for Memecoin Universe
(Bloomberg) -- Pump.fun's decision to raise $1 billion is sparking concern that a token sale by the most popular platform for creating memecoins risks siphoning demand away from the hundreds of coins issued daily through the website.
The platform, which is based on the Solana blockchain, is still in the early stages of the token offering, according to a person familiar with the plans who asked not to be named discussing private company information, Bloomberg News reported Tuesday. Alon Cohen, co-founder of Pump.fun, didn't respond to requests for comment.
While details of the sale are not clear, the offering would rank among the largest ever in crypto. The last major token sale was the January debut of the Trump memecoin, which instantly generated billions of dollars in trading volume within a few days. The broader memecoin sector saw a drop in trading when the Trump token was launched, as speculators sold other crypto assets to buy President Donald Trump's official token.
Pump.fun 'could be a drain on liquidity,' said Ryan Watkins, co-founder of crypto investment fund Syncracy Capital. 'The raise will take place over the course of a month. And I think during that month, any asset in the Solana ecosystem is vulnerable to being sold to fund that purchase.'
Pump.fun, which has been compared to the edgy 4chan social media network, allows users to quickly create, promote and sell memecoins, a type of token that has no intended utility but is often associated with jokes, memes and celebrities.
The platform has been one of the biggest drivers of the explosive growth in memecoins and the attendant burst in activity on the Solana blockchain in the past year. Retail and professional investors alike have poured billions of dollars into the sector, and their quests for quick profits are seen as generating a lucrative stream of fees for Pump.fun's founders.
Other market participants also questioned the relatively high valuation of Pump.fun based on the token sale, which is set to be at a $4 billion fully diluted valuation, or FDV. The measure equals the current price times the total number of tokens expected to ever be in circulation.
'I would consider investing at $50 million FDV,' said Christine Fang, managing partner at Hong Kong-based crypto hedge fund PSE Trading. 'Not sure if the $4 billion valuation is justified, especially with the lack of liquidity overall in altcoins.'
But with few details about the token sale, others said it's too early to make a conclusion.
'People are overly bearish on this, specifically because they don't know the details,' said Mert Mumtaz, co-founder and chief executive officer of Solana infrastructure project Helius.
'Pump is the main name behind memes today,' Mumtaz added. 'So if they raise a bunch of extra money from investors instead of users, I don't see why they wouldn't invest this money to grow the market beyond what exists today. I mean, their entire business relies on this.'
More stories like this are available on bloomberg.com

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


News18
7 minutes ago
- News18
Disney, Universal sue AI firm Midjourney for copyright infringement
Last Updated: New York, Jun 11 (AP) Disney and Universal have filed a copyright lawsuit against popular artificial intelligence image-generator Midjourney on Wednesday, marking the first time major Hollywood companies have enter the legal battle over generative AI. Filed in federal district court in Los Angeles, the complaint claims Midjourney pirated the libraries of the two Hollywood studios to generate and distribute 'endless unauthorized copies" of their famed characters, such as Darth Vader from Star Wars and the Minions from Despicable Me. 'Midjourney is the quintessential copyright free-rider and a bottomless pit of plagiarism. Piracy is piracy, and whether an infringing image or video is made with AI or another technology does not make it any less infringing," the companies state in the complaint. The studios also claimed the San Francisco-based AI company ignored their requests to stop infringing on their copyrighted works and to take technological measures to halt such image generation. Midjourney could not immediately be reached for comment. The small startup is one of a crop of research labs enabling people to experiment with AI-generated visuals and text. Major AI developers don't typically disclose their data sources but have argued that taking troves of publicly accessible online text, images and other media to train their AI systems is protected by the 'fair use" doctrine of American copyright law. (AP) GSP


Time of India
31 minutes ago
- Time of India
Amazon and Microsoft-backed startup to build Recycling Plant of rare earths in Canada, the 'rare minerals' that analysts say gives China upper hand in trade war with the US
Cyclic Materials , a startup supported by Amazon, Microsoft, and BMW Group, plans to invest $25 million in a rare-earths recycling plant and research center in Ontario, Canada, according to a statement reported by Bloomberg. The facility, set to begin operations in the first quarter of 2026, aims to bolster North America's supply of critical minerals amid rising global demand and China's dominance over rare-earth markets. Cyclic's technology extracts rare earths from end-of-life products like wind turbines, data-center hard drives, and electric vehicle components, addressing supply chain vulnerabilities highlighted by China's export restrictions in retaliation to U.S. tariffs, Bloomberg noted. The company already operates a demonstration facility in Kingston and a processing site in Arizona. What is the rare earth minerals tussle between US and China The rare earth minerals issue between the U.S. and China centers on a trade dispute over critical minerals essential for advanced technologies, including defense systems, electric vehicles, semiconductors, and renewable energy. China mines about 70% of the world's rare earth elements (17 metallic elements with unique properties) and processes over 90%, giving it significant control over global supply chains. They also produce 85% of rare earth magnets used in electric motors and other tech. 'Rare-earth elements are a $20 billion to $30 billion market globally, but they unlock multi-trillion-dollar industries,' Ahmad Ghahreman, CEO of Cyclic Materials, told Bloomberg. 'We are creating a secure, local supply for these critical metals.' The Kingston plant is designed to process 500 metric tons of feedstock annually, producing rare-earth oxides for magnets used in EV motors, wind turbines, and consumer electronics. Feedstock will be sourced from Cyclic's Arizona facility and a network of partners, with output supplied to companies like Solvay SA. The project aligns with Canada's push to become a hub for critical minerals, supported by government incentives and growing interest from automakers and tech giants. Cyclic's initiative could reduce reliance on Chinese rare earths, which account for over 80% of global supply, per Bloomberg. The research center will also develop advanced recycling techniques, positioning Cyclic to meet surging demand for sustainable mineral sources in industries critical to the green energy transition.


Mint
an hour ago
- Mint
Oil Surges as US Orders Partial Evacuation of Iraqi Embassy
Oil surged as the US government ordered a partial evacuation of its embassy in Iraq amid rising security risks. West Texas Intermediate futures jumped 4.9% to settle above $68 a barrel, the largest gain since October, as the Trump administration reduced embassy staff in Iraq and permitted military service-members' families to leave the region in response to ongoing security concerns. The UK Navy also issued a rare warning to mariners that higher tensions in the Middle East could affect shipping. The developments compounded speculation about possible supply disruptions in the Middle East after AFP reported that Iran threatened to target US military bases in the region if conflict breaks out. 'Iranian rhetoric has turned notably more hostile, and these threats are being substantiated by real-world developments,' said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group. 'While geopolitical rallies are often seen as selling opportunities, this situation carries the added complexity of potential Israeli military action if negotiations break down, which is keeping traders more cautious about selling into the rally.' Elsewhere, President Donald Trump told the New York Post he's 'less confident' about whether he can convince Tehran to agree on shutting down its nuclear program. He also posted on social media that a trade deal with China was 'done,' subject to the approval of President Xi Jinping. Oil had been weighed down by expectations that a trade war between the world's two largest economies would hurt demand and that a deal with Iran would bring back sanctioned barrels, adding to rising OPEC supplies. Prices have recovered in recent sessions, supported by easing trade tensions and the outlook for summer demand. A monthly report from the US Energy Information Administration underscored the oil market's current uncertainties. While the agency expects supply to eclipse demand by 800,000 barrels a day this year, the most since it began publishing a forecast for 2025, it also doesn't see US crude production topping last month's levels before the end of next year, a sign that lower prices are curbing some supply. Signs of market tightness have also appeared along the futures curve. Earlier this week, the February-March WTI spread flipped to backwardation — where near-term prices are higher than longer-dated ones — for the first time since April, with several subsequent months following suit earlier today, signaling concerns about oversupply are easing. To get Bloomberg's Energy Daily newsletter in your inbox, click here. This article was generated from an automated news agency feed without modifications to text.