Ethereum founder Vitalik Buterin started a sharp decline when he sold meme coins airdropped to him for advertising purposes. Meanwhile, one trader was able to profit heavily from the almost 100% drop.
Vitalik earned 186 ETH from Buterin-induced drop
to the beginning of development cryptocoin.com We have included it in this article. Shikoku Inu (SHIKO), one of the 3 meme coins sent to Buterin, witnessed a catastrophic 100% drop after the sale. However, some traders managed to turn the situation into profit.
According to transaction records provided by Lookonchain, SmartMoney and an arbitrage trader immediately noticed Buterin’s sale and bought a hefty sum of SHIKOKU at the bottom. Traders managed to sell the rallying meme coin at the peak price soon after.
1/ Due to #VitalikButerin selling $SHIK yesterday, a SmartMoney made ~96ETH ($150K) with 14 $ETH on $SHIK, and an arbitrageur made 89.6 $ETH ($140K) with 6 $ETH on $SHIK.
How did they do it?👇 pic.twitter.com/DieIqBMBDc
— Lookonchain (@lookonchain) March 8, 2023
In details, one of the big profit traders SmartMoney bought 34.2T SHIKOKU with 14 ETH and sold 12.2 trillion SHIKOKU for 38.36 ETH, 10 trillion SHIKOKU for 26.24 ETH. Transferred 10 trillion SHIKOKU to another wallet. Trader currently owns 2 trillion SHIKOKU. The other arbitrageur bought 38 triltons of SHIKOKU with 6 ETH and sold it for 89.6 ETH.
Vitalik Buterin’s actions
According to Etherscan, on March 7, a wallet owned by Buterin received approximately 10 billion Cult DAO (CULT) and 1.25 ETH ($500 trillion SHIKOKU (SHIK) for 380.3 ETH ($595,448), 58.1 ETH ($91,021)). It sold 50 billion Mops (MOPS) for $1,950).
The low liquidity of the tokens caused the sales to directly affect the prices. According to CoinMarketCap data, the biggest price drop from tokens was SHIK, which fell 86% after Buterin’s sale.
#PeckShieldAlert $SHIK (SHIKOKU) has dropped -95.8%
Vitalik Buterin-labeled address has dumped ~5T $SHIK, and gained ~164 $ETH (~260k) and transferred 214 $ETH ($337k) to EthDevhttps://t.co/Uw6TA1RDKP pic.twitter.com/FuIbgGgrdA— PeckShieldAlert (@PeckShieldAlert) March 7, 2023
Why did Vitalik Buterin choose to sell?
While some in the crypto community shared their disappointment with the sale decision given Buterin’s huge impact on the tokens, others suggested it was due to the tax consequences of receiving airdrops, which are subject to income tax in most countries.
vitalik.eth (@VitalikButerin) is selling his free shitcoins.
Currently sold 50B $MOPS for 1.25 $ETH($2K), sold 10B $CULT for 58 $ETH($91K), sold 500T $SHIK for 380 $ETH($600K).https://t.co/SboWZsO8WY pic.twitter.com/xNaRTeVM7K
— Lookonchain (@lookonchain) March 7, 2023
Can the decline continue?
A sudden price drop is not uncommon in the cryptocurrency market, as the market is highly volatile and subject to fluctuations. However, such extreme dips can cause panic selling and worsen the situation. Therefore, it is important to be careful and consider the long-term potential of a cryptocurrency before investing.
Despite the recent sell-off, SHIKOKU may rally in the future as it is highly illiquid and its price may rise after investors maintain a relatively insignificant buying volume. However, investors should always do thorough research and analysis before investing in any cryptocurrency to avoid losses.
