Zhu Su, founder of the bankrupt cryptocurrency firm Three Arrows Capital, said in his latest statement that PumpFun’s PUMP token generation efficiency (TGE) was a key factor accelerating the rise in the price of Solana (SOL).
Zhu Su is currently wanted by the US and is a fugitive. The collapse of Three Arrows Capital triggered a massive downturn in the cryptocurrency market.
Su stated that both market dynamics and investor behavior played a role in this rise. According to Su, the Pump.fun platform's lack of a large amount of SOL does not exert downward pressure on the price, alleviating investor concerns about the risk of selling.
Su also stated that there's a misperception in the market: users buy SOL with US dollars, trade on the platform, pay transaction fees with SOL, and Pump.fun then converts these SOLs into dollars. He added that this structure is a classic consumer business model and won't directly cause a decrease in the price of SOL.
PumpFun developers were in the news for frequently selling the large amounts of SOL revenue they earned on the market.
Zhu Su also noted that the financial activity PumpFun has generated within the Solana ecosystem is noteworthy. Figures like the $106 million monthly revenue in November, which the founder said demonstrates Solana's strong performance and is attracting interest from both developers and investors.
According to Su, this not only fuels a surge in Solana-based projects but also fuels a renewed appreciation of SOL as an investment vehicle. The fact that investors who participated in PumpFun's initial coin offering are redirecting their profits back into SOL, Su believes, is another factor driving up the price by increasing demand within the ecosystem.
*This is not investment advice.
