This year has witnessed a surge in the launch of meme coins, many of which have raised concerns due to their questionable ties. Lookonchain’s data has shed light on the risks associated with trading meme coins, particularly those that are endorsed by celebrities. One recent example is American celebrity Caitlyn Jenner’s JENNER token, which made its debut on the Solana blockchain. Despite skepticism surrounding the legitimacy of the token, some traders still took the plunge and invested in JENNER tokens.
Trader’s Misfortune
A trader, who had previously experienced substantial gains by trading the BOME token, decided to invest 1,208 SOL in JENNER. Unfortunately, the trader ended up losing 785 SOL in just one day, amounting to approximately $133.4K. This sharp decline in fortune serves as a stark reminder of the volatile nature of meme coins and the risks associated with investing in them.
Celebrities endorsing meme coins can have a significant impact on their popularity and market performance. In Jenner’s case, initial skepticism was fueled by concerns that her account may have been hacked when she first promoted the token. However, as she continued to endorse JENNER, fears subsided. Jenner even pledged to make a donation to former President Donald Trump’s campaign if the namesake token reached a $50 million market cap. Her advocacy for cryptocurrency, which she dubbed “ULTRA MAGA,” added another layer of controversy to the situation.
While meme coins continue to generate hype in the market, many experts are wary of their long-term implications. These experts believe that meme coins could potentially overshadow the efforts of legitimate projects and teams dedicated to developing real products. Prominent on-chain investigator ZachXBT also highlighted the prevalence of meme coin scams, especially those endorsed by “d-tier” celebrities with dubious backgrounds. Despite their questionable past, these celebrities often attract significant support when they launch new meme coins, leading to pump-and-dump schemes that harm unsuspecting investors.
The proliferation of meme coins, especially those endorsed by celebrities, poses significant risks for investors. The recent example of the JENNER token serves as a cautionary tale of the potential pitfalls associated with trading meme coins. As the hype around meme coins continues to grow, it is essential for investors to exercise caution and conduct thorough research before venturing into this volatile market.
