The trend of launching meme coins has significantly increased this year, with many of these coins having questionable ties. Lookonchain’s data has shed light on the dangers associated with trading meme coins, especially those endorsed by celebrities. One recent example is American celebrity Caitlyn Jenner’s JENNER coin, which was introduced on the Solana blockchain.
Despite doubts about the legitimacy of the JENNER token, some traders still decided to invest in and trade it. One trader, who had previously experienced a significant profit by trading the BOME token, suffered a major loss with JENNER. After investing 1,208 SOL into JENNER, the trader only managed to recover 423 SOL, resulting in a loss of 785 SOL, equivalent to around $133.4K, in just one day.
Initially, many market participants dismissed Jenner’s promotion of the token, fearing it could be a hack. Past incidents involving celebrities promoting coins or crypto protocols falsely have raised similar concerns. Despite the usual swift detection and resolution of such compromises by security teams, Jenner’s continued promotion of the token raised alarms. Jenner later clarified that her account was not hacked and even pledged to donate to former President Donald Trump’s campaign if the namesake token on the Ethereum blockchain reached a $50 million market cap.
The hype surrounding meme coins shows no signs of slowing down, but many experts are concerned about their rapid proliferation. Some experts believe that meme coins have a negative impact on the industry, often overshadowing the work of legitimate projects. On-chain investigator ZachXBT highlighted the issue of meme coin scams, especially those supported by “d-tier” celebrities known for promoting questionable schemes. Despite their questionable pasts, these celebrities still attract support for their new ventures, leading to pump-and-dump situations.
ZachXBT cautioned that celebrities endorsing meme coins are primarily driven by financial gain, offering little effort or value in return. These actors are content with profiting from the hype surrounding meme coins without considering the potential consequences for investors. This trend of promoting meme coins by celebrities with dubious backgrounds raises significant concerns within the cryptocurrency community.
The proliferation of meme coins and their endorsement by celebrities pose significant risks for traders. It is essential for investors to conduct thorough research and exercise caution when considering investments in meme coins, especially those with questionable ties. The industry must address the challenges posed by meme coins to protect the interests of investors and maintain the integrity of the cryptocurrency market.
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