Influence of Celebrity Memecoin Projects in the Crypto Market
The recent surge in celebrity-backed memecoin projects has sparked a new trend in the cryptocurrency space. However, similar to previous bull cycles, these projects have faced allegations of scamming inexperienced investors, shedding light on the enduring issue of influencer involvement in the crypto market. This is evident from the plummeting volumes and significant price fluctuations in memecoins.
Emergence of Celebrity Memecoin Craze
As per data from the blockchain analytics platform CryptoQuant, the dominance of memecoins in the altcoin market has exhibited a steep decline starting from mid-May and continuing through June.
Tristan Frizza, co-founder of Zeta Markets based on the Solana network, pointed out that celebrities are drawn to token projects due to the perceived low effort required to potentially yield substantial gains. He emphasized the volatility of cryptocurrencies, particularly memecoin projects, which are highly unstable and often face failure, ultimately trending towards zero. Frizza highlighted that the involvement of celebrities endorsing memecoin projects does not alter this inherent risk.
Unraveling the Memecoin Phenomenon
The celebrity-sponsored memecoin trend took off with the entrance of Caitlyn Jenner, an American media personality, who launched her memecoin project on May 28. Despite initial suspicions of a fake account hack, the token garnered a market value of $40 million within the first 24 hours. Rapper Iggy Azalea followed suit with the introduction of the Mother Iggy (MOTHER) memecoin project on the Solana network post-Jenner's success. While the token enjoyed initial growth, it faced a sharp decline recently amidst ongoing market uncertainties.
Nigerian musician Davido also hopped onto the bandwagon by launching the Timeless Davido (DAVIDO) token. However, skeptics raised concerns regarding the project's legitimacy, citing allegations of pre-mining and token dumping. Rapper Rich the Kid's Rich (RCH) token attracted memecoin enthusiasts initially but subsequently nosedived, losing more than 90% of its value, settling at $61,000.
Furthermore, memecoin ventures associated with boxing icon Floyd Mayweather (FLOYD), and rappers Moneybagg Yo (SPEAK) and Trippie Red (BANDO) witnessed over a 90% drop in value post-launch.
