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Celebrity Memecoins Highlight Crypto’s Influencer Problem – TradingView News
Celebrity memecoins are the latest cryptocurrency trend among influencers, with names like Katlyn Jenner and Iggy Azalea recently launching their own memecoins.
However, like every bull cycle, several celebrity-linked projects have already been accused of retail dumping and fraud against unsuspecting amateur investors, highlighting the crypto market’s long-standing problem with influencers.
With each boom cycle, celebrities adopt the latest trends.
During the 2017 bull run, several tokens were promoted through celebrity-endorsed initial coin offerings (ICOs), including those of socialite Paris Hilton, boxer Floyd Mayweather, and actor Jamie Fox.
Most of these ICO projects turned out to be failures, with one study suggesting that over 80% of ICO projects in 2017 were scams. However, most of the celebrities involved escaped fines for promoting fraudulent projects.
During the 2021-2022 bull season, non-fungible tokens (NFTs) and the metaverse were the new trends, with many celebrities using the new technology for self-promotion.
Jake Paul, DJ Khaled, David Dobrik, and Floyd Mayweather have promoted fraudulent NFT projects, and even former President Donald Trump has been accused of promoting and releasing NFTs with no real value.
In 2024, the newest trend is memecoins, several of which were created by random influencers on the Internet before gaining popularity.
Several misspelled celebrity meme tokens, such as Doland Tremp (TREMP) and Jeo Boden (BODEN), also made headlines and were even listed by centralized exchanges.
In late May, celebrities like Iggy Azalea, Caitlyn Jenner, rapper Lil Pump and online influencers like Andrew Tate jumped on the memecoin bandwagon as the tokens reached peak popularity.
However, when famous or nearly famous influencers and celebrities enter the crypto space with grandiose promises, it often indicates that the market has reached its peak.
This was evident from the recent drop in memecoin volumes and the sharp drop in prices.
According to data shared by CryptoQuant, memecoin’s dominance in the altcoin market saw a sharp decline starting in mid-May and plummeted in June.Cointelegraph
Tristan Frizza, co-founder of Solana-based decentralized exchange protocol Zeta Markets, told Cointelegraph that celebrities get involved in token projects because they see them as a low-effort way to potentially earn a big payday.
“Retail users intending to speculate on cryptocurrencies need to be aware that cryptocurrencies are volatile and that memecoins in particular are extremely volatile and most fail; in other words, they tend to zero. The involvement of any celebrity or personality endorsing or talking about a memecoin does not change this fact,” Frizza added.
Rise of celebrity memecoins
The celebrity memecoin frenzy began with the memecoin of American media personality Caitlyn Jenner (JENNER) on May 28.
The token reached a market cap of $40 million within 24 hours of launch, despite a rocky start where many people initially thought the token was part of a deep fake account X hack.
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Rapper Iggy Azalea launched her memecoin Mother Iggy (MOTHER) on the Solana blockchain following the initial success of JENNER. The token’s value skyrocketed within weeks. However, the price fell significantly last week amid ongoing market turmoil.
Nigerian musician Davido joined the trend and launched the Timeless Davido (DAVIDO) token. However, some questioned the validity of the project, claiming that it featured a pre-mine and token dump.
American rapper Rich the Kid’s Rich (RCH) token has also attracted the attention of memecoin traders. However, the token has since fallen to a market cap of $61,000, losing over 90% of its value.
Memecoins linked to boxing legend Floyd Mayweather (FLOYD), as well as American rappers Moneybagg Yo (SPEAK) and Trippie Red (BANDO), have also fallen by more than 90% since they were launched.
A problematic relationship with social media
A common link between the major celebrity memecoin launches is an Instagram influencer named Sahil Arora.
Arora is accused of planning and promoting the launch of celebrity meme tokens, many of which have been pulled and disappeared. In social media posts, Jenner and Azalea claimed that Arora “deceived” them.
Arora allegedly played the role of intermediary, launching tokens on behalf of celebrities – sometimes without their knowledge – before convincing them to use their social media to promote the tokens by promising riches.
He would then sell his own significant holdings, removing liquidity and causing token prices to plummet.
X ended up suspending his account after several allegations surfaced.
Max Jones, co-founder of Solana-based memecoin launchpad MemePad, told Cointelegraph that the rise in popularity of celebrity tokens is due to the way they are promoted, with their price depending on the media appearances of the person they represent. .
A market so dependent on hype cannot last forever:
“This hot market will likely face a downward trend in activity; We already see a decline in 24-hour trading volume from over $100 million last week to $38 million. Many projects will be abandoned.”
Jones said celebrity tokens should be launched on professional launchpads with a sustainable economic model, rather than appearing as poorly made, chaotic tokens. If millions of fans interact with a low-quality project or scam, “it could drive people away from the token or crypto.” “We would like to see more high-quality projects with regularly updated incentives and use cases,” she added.
Looking back at the series of celebrity memecoin launches over the past few months, only one or two have managed to maintain their value beyond a week.
Aside from Azalea MOTHER, most tokens have lost over 90% of their value since launch.
This highlights the bitter truth repeated in every bull cycle: influencer culture in crypto comes at a cost for retail traders.
Celebrity memecoins are among the worst crypto trends
Over the years, celebrity influence in crypto has been constant, and despite the number of scams and rug pulls, before 2024, most celebrity-influenced projects promised some real-world value and innovation.
Memecoins, on the other hand, are highly speculative. New traders invest their hard-earned money, hoping to make big returns in one of the hundreds of recently released memecoins.
However, with the influence of celebrities, the world of memecoins has become even more prone to scams as fans invest their money in their favorite celebrities’ token without properly understanding the ecosystem.
Ethereum co-founder Vitalik Buterin has also criticized celebrity memecoins, claiming that the financialization of crypto trends by celebrities is only justified if it serves a purpose that adds value to society.
He cited the example of Ashton Kutcher and Mila Kunis’ Stoner Cats project, claiming it was far more respectable than anything seen in the celebrity memecoin trend of 2024. He said, “At least Stoner Cats funded a real show, whereas memecoins lack substance and purpose.”
Nansen analyst Edward Wilson told Cointelegraph that memecoins could be a fun way to embrace crypto, but highlighted that not all memecoins are created equal:
“Their ‘blue-chip’ memes like DOGE and PEPE serve as a way to tokenize culture, and that’s where the ‘value’ lies. But what we’ve seen in recent weeks with celebrities past their sell-by date are low-level efforts to extract what little they can from their community to make a quick buck. This is something that has received significant resistance in the crypto community, and rightly so.”
At its height, crypto influencers created new memecoins by raising funds on X, many of which disappeared with the initial fund. In one such case, memecoin creator Slerf accidentally burned $10 million. However, memecoin was eventually launched and gained a market value of $500 million.
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The memecoin frenzy has reached such a level that some people have started making memes out of anything. One example was when Cardano founder Charles Hoskinson tweeted a photo of his pet pig, only to find a memecoin the next day with a million dollars in market value.
I don’t know if a photo of my pig resulted in a memecoin worth almost a million dollars in less than 12 hours. pic.twitter.com/Hzhe0qjkI0
Like anything else in crypto, celebrity tokens have a positive and a negative side. On the one hand, these coins allow fans to interact with their role models in a fun way, while artists and athletes strengthen their communities and gain greater media coverage.
On the other hand, the prevalence of fraud and substantial price fluctuations are risky and do little to endear crypto to the investing public.