An investor who initially invested just 6 SOL (around $815) in 30.1 million Moo Deng (MOODENG) memecoins in September now holds assets worth $9.4 million, according to Lookonchain. This extraordinary growth highlights the potential of high-risk crypto assets. However, experts are skeptical about whether the investor will be able to realize the full profit due to the token’s low liquidity.

What Low Liquidity Is and How It Affects Profitability

Liquidity refers to the volume of trading an asset has in the market. In the case of Moo Deng (MOODENG), due to low liquidity, any attempt to sell a large amount of tokens could result in a sharp drop in price. This can significantly limit the investor’s ability to sell the tokens at their current peak value. When a market lacks sufficient liquidity, even a significant increase in a token’s value may not allow for full profit extraction, as the market may not handle a large sale.

The Risks and Rewards of Memecoins

Memecoins, such as MOODENG, are known for their volatility and high risks but also the potential for substantial short-term profits. Investing in such tokens can yield enormous returns, but they are extremely unstable and largely driven by speculation. Investors should be aware that despite sharp price increases, these assets always carry a high risk of losses due to liquidity issues and the lack of fundamental value.

An Example from the Memecoin World

Similar cases have occurred in the cryptocurrency market, where rising popularity or hype around a specific token led to a surge in interest, but investors faced difficulties realizing their profits when attempting to sell. This makes memecoins one of the most speculative forms of investment in the crypto market.