3 Reasons Pump.fun Could Completely Collapse in the Near Future

Pump.fun is facing the risk of a complete collapse as the on-chain metrics and revenue are currently not looking promising. As indicated, the monthly revenue in July dropped to 24.96 million dollars. This figure is approximately 80% lower than the peak of 130 million dollars, indicating that this launchpad platform is experiencing a severe revenue decline. Simply put, there are fewer and fewer projects releasing new tokens, causing the cash flow to dry up quickly. The consequence is that the platform cannot sustain itself. However, PUMP is still being traded at 4.7 times its annual revenue – a quite high figure.

So, where does that 4.7 times come from? Pump.fun recorded a revenue of 24.96 million dollars in July, which annualized would be around 299.5 million dollars. With 354 billion tokens in circulation and a market price of 0.0028 dollars, the market capitalization is about 1.02 billion dollars. This brings the revenue multiplier to around 4–5 times. Therefore, fundamentally speaking compared to the price, PUMP is being valued quite high. In other words, the price of PUMP is higher than the revenue that can support it. Pump.fun is Running Out Thus, PUMP is in a difficult situation, but the high valuation does not help much. In the past month, the price has fallen by more than 33%. Combined with weak growth and revenue, this makes the token weak. Any decline in activity could trigger a rapid sell-off. Worse, the concentration of supply of Pump.fun remains at a dangerous level. The top 10 wallets hold about 75% of the total tokens, making PUMP vulnerable to a mass dump.

From every angle, PUMP is facing a risky situation. Weak revenue, stagnant growth, and extremely high supply concentration make this token very vulnerable to any decrease in activity. With the token being traded much higher than its intrinsic value, even a slight slowdown can lead to a strong sell-off, placing the platform under real pressure. Therefore, Pump.fun is definitely a project worth keeping an eye on.