Celebrity-Influenced Memecoins: A Rising Trend in the Crypto Market and Its Fallouts
Summary:
The article discusses the rising trend of celebrity-influenced memecoins in the cryptocurrency market. Stars like Katlyn Jenner and Iggy Azalea have launched their own memecoins. Many such projects, however, have been accused of retail dumping and scamming novice investors, echoing long-standing issues within the crypto market. From 2017's celebrity-endorsed token offerings to recent NFT scams, this cycle of celebrity involvement often signals a peak in the market. Consequently, this can lead to a fallout, as demonstrated by the recent slump in memecoin prices. Despite the risky nature and volatility of these assets, celebrities continue to see such token projects as a potentially profitable endeavor.
Crypto trends influenced by celebrities, such as memecoins, are gaining popularity, with individuals like Katlyn Jenner and Iggy Azalea launching their own versions. Despite this, many such projects have been accused of deceiving novice investors through retail dumping or scams, highlighting persistent issues within the cryptomarket and its interactions with influencers. This trend of celebrities jumping on new crypto trends during a bullish cycle isn't new, as seen in the 2017 bull run when tokens backed by celebrities like Paris Hilton, Floyd Mayweather, and Jamie Fox were in high demand. Most of these coin offerings turned out unsuccessful, with research indicating that over 80% of projects in 2017 were fraudulent. Still, most celebrities got off with just a fine for their involvement in these scams. The 2021-2022 bull season saw NFTs and the metaverse as hot trends, and these were exploited by celebrities for self-promotion. Jake Paul, DJ Khaled, David Dobrik, Floyd Mayweather, and even Donald Trump were reported to have endorsed scam NFT projects or released NFTs with no substantive value. In 2024, memecoins rose to popularity, with internet influencers helping them gain mainstream appeal. High-profile personalities like Iggy Azalea, Caitlyn Jenner, Lil Pump, and Andrew Tate, among others, embraced memecoins at their peak. However, the involvement of celebrities often signals a market peak, followed by a sharp drop in volumes and prices, as seen in recent memecoin trends. Tristan Frizza, the co-founder of Solana-based decentralized exchange protocol Zeta Markets, opined that celebrities see token projects as an easy way to make profits. However, despite the involvement of famous personalities in endorsing memecoins, it’s important to remember that these assets are extremely volatile and most often, they fail. The memecoin frenzy was initiated by American media personality Caitlyn Jenner's (JENNER) memecoin, which despite a rough start, reached a market cap of $40 million within 24 hours of launching. Rapper Iggy Azalea followed it up with her memecoin - Mother Iggy (MOTHER) on Solana blockchain, which saw a sharp rise in value over weeks, though it has since declined amid market turmoil. Nigerian musician Davido also launched his own token, Timeless Davido (DAVIDO), but it's validity has been questioned due to alleged pre-mine and token dump. Other celebrities, like American rapper Rich the Kid with his Rich (RCH) token and boxing legend Floyd Mayweather (FLOYD), have all seen more than 90% drop in the value of their memecoins ever since their launch. A troubling connection between these celebrity memecoin launches was the involvement of Instagram influencer Sahil Arora, who allegedly spearheaded the token launches and later conned the celebrities into promoting them, which led to multiple scams. This increasing popularity of celebrity tokens is tied to their promotion, and their value relies heavily on the media presence of their representatives. However, a market sustained on hype is not sustainable, and many projects will eventually be abandoned due to a lack of substantial economic model or framework. Edward Wilson, an analyst at Nansen, noted that while memecoins could be an interesting way of embracing crypto, not all memecoins hold equal value. He criticized the trend of celebrities exploiting their community to make a quick profit, which has been opposed aggressively by the crypto community. The memecoin frenzy has become so rife that even random situations are being turned into memes. A perfect example of this happened when Cardano founder, Charles Hoskinson, saw a memecoin made out of a tweet featuring his pet pig, which saw its market cap reaching a million dollars in less than 12 hours. There's a flipside to every aspect in the world of crypto. On one hand, celebrity tokens provide an innovative way for fans to connect with their idols while also enhancing their communities and boosting media attention. However, the predominance of scams and huge price fluctuations pose a high risk and do little to foster trust in cryptocurrencies among the investing public.
Published At
6/26/2024 4:54:51 PM
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