The PUMP token associated with the PumpFun platform has seen a decline of nearly 35% in its value over the past month, significantly dropping compared to the overall performance of the cryptocurrency market.
This decline occurred despite the platform's ongoing buyback program. This raised questions about the effectiveness of revenue-based support mechanisms in the face of continued massive sell-offs by large investors and a broader market downturn.
Demand driven by buybacks fails amid a broader sell-off.
Pump.fun launched its buyback program for its native token PUMP in July 2025, shortly after the token's launch. Under this mechanism, the platform allocates 100% of its revenues to purchase PUMP, creating ongoing and significant buying pressure.
Buybacks since inception have totaled approximately $218.1 million in total purchases. The network executed $32.7 million in buybacks over the last 30 days alone.
Token buyback operations are theoretically bullish, as they reduce the circulating supply and provide ongoing demand support.
However, this revenue-backed strong strategy was not enough to offset the impact of broader market declines. Since early October, the cryptocurrency market has faced increasing headwinds.
The total market capitalization of cryptocurrencies has decreased by nearly 30%, with major assets like Bitcoin (BTC) and Ethereum (ETH) recording significant losses.
PUMP has not been immune to this trend. The token has recorded a decline of about 35% over the last 30 days.
An analyst wrote: "PumpFun allocates 100% of its revenues to buy back PUMP, resulting in daily buying pressure of about $1 million. However, the token has recorded a decline of over 80% from its peak and is about 30% lower than its previous lows before the buyback. This clearly shows that buybacks, no matter how strong, have limited impact during market downturns, especially when token utility is weak or constrained."
The downward trend extended further today, with the altcoin dropping an additional 6.9%, and at the time of writing, it was trading around $0.0017, a price not seen since the widespread sell-off that occurred in October.
PUMP challenges have been exacerbated by recent whale activity. Reports indicate that a prominent whale deposited 3.8 billion PUMP, worth approximately $7.57 million, into FalconX after holding the position for three months. This whale withdrew tokens from Binance at $19.53 million, resulting in an unrealized loss of $12.22 million.
Data from Nansen indicates that over the past thirty days, the balances of large investors, namely wallets holding more than one million PUMP tokens, have decreased by 13.07%, and when large holders exit their positions at significant losses, it often reflects declining confidence in the token.
The performance of PUMP highlights the limits of revenue-backed buybacks even when aggressive during overall market declines. As long as selling pressure from large holders continues and investor appetite for risk remains weak, buybacks alone are unlikely to provide sustainable price support.
