A wave of buyback operations is sweeping the cryptocurrency market, and Pump.fun, one of the most popular names in recent months, has officially joined this trend.
With the price of "Pump" stock rising by 15% in the past twenty-four hours and transferring 18 million USD to the buyback, the stock is attracting increasing interest from investors. But does this rise reflect real momentum for recovery, or is it just a temporary psychological reaction before a bubble bursts?
Is Pump.fun trying to create real utility for its token?
After the success of its initial coin offering (ICO), Pump.fun has undergone increased scrutiny from the cryptocurrency community. Many see the project's valuation of $4 billion as exaggerated. This concern stems from the lack of utility of the PUMP token, governance mechanisms, and revenue-sharing features within its ecosystem.
However, recent chain data showed that Pump.fun transferred $18 million to a dedicated buyback wallet.
According to EmberCN, the platform used transaction fee revenues to accumulate and buy back 3.04 billion PUMP tokens. This move immediately sparked a positive reaction in the market, raising the price of PUMP by over 15%.
At the time of writing this report, the price of PUMP was trading at $0.00656, an increase of 12% in the past 24 hours.
Buybacks are a widely used financial strategy in traditional and cryptocurrency markets to reduce circulating supply, thereby creating upward pressure on price.
For projects like Pump.fun, buybacks also serve as a strong marketing signal, contributing to boosting investor confidence in the short term. However, doubts still surround the buyback movement in this project.
Different platforms also manage buyback plans.
Pump.fun is not the only project that has joined the buyback wave. Other platforms, such as FET, AAVE, IOST, and Polyhedra (ZKJ), have recently announced plans to buy back tokens, with some committing tens of millions of dollars.
However, sudden price increases and large capital deployments do not necessarily enhance intrinsic value. Price spikes driven by buybacks, without solid technological foundations or clear benefits for token holders, may lead to artificial rises that could be subject to sharp corrections if market sentiment changes.
Moreover, Pump.Fun still largely operates within the memecoin and presale sectors, which are known for high speculation and limited transparency.
In conclusion, buybacks can be an effective short-term tool, but the added value may evaporate quickly without a long-term development roadmap and real-world utility.
