The recent launch of Kanye West's YZY memecoin ended with a sharp decline in its value, leaving many investors at a loss. Investigations reveal that actions by organized traders played a key role in this situation.
Organized Market Manipulations
Blockchain analytics firm Nansen tracked 13 wallets that earned over $1 million during the volatile launch of YZY. These traders made a total of $24.5 million while leaving 56,000 retail investors devastated. The price of the token surged by 1400% in the first minute and crashed by 74% in 24 hours, characterizing the situation as a clear example of pump-and-dump.
Catastrophic Losses for Investors
Investor losses were catastrophic, with one wallet losing a confirmed amount of $1.8 million, another $1.2 million, and a third trader left with more than $800,000 in unrealized losses. This underscores the crushing retail impact of market manipulations.
Investor Protection Issues
The discussions around celebrity memecoins are becoming increasingly urgent. Market participants and experts, such as BitMEX co-founder Arthur Hayes, emphasize that such assets serve as tools for wealth transfer into the hands of experienced operators. The situation with YZY highlights that investors are at risk due to inadequate protections during the launch of celebrity tokens.
The launch of Kanye West's YZY memecoin highlights the dangers associated with investing in celebrity-related tokens. Manipulations by experienced traders can leave many retail investors in a compromised position.
