In the year of meme coin mania, we have witnessed a surge in the launch of meme coins with dubious connections. Lookonchain’s data has shed light on the dangers of trading meme coins, especially those backed by celebrities. The recent example of American celebrity Caitlyn Jenner’s JENNER coin, launched on the Solana blockchain, serves as a stark reminder. Despite skepticism surrounding the token’s legitimacy, some traders still dove in to purchase and trade JENNER tokens. One trader experienced a significant setback after turning a huge profit trading the BOME token, only to lose a substantial amount with JENNER. Investing 1,208 SOL in JENNER resulted in a loss of 785 SOL, equivalent to approximately $133.4K, within just one day, as reported by Lookonchain.
Initially, there were doubts about Jenner’s post promoting the token, with concerns of a possible hack. While such incidents involving celebrities endorsing coins have occurred before, they were usually promptly addressed. However, Jenner’s endorsement of the token continued hours after its launch, causing further apprehension. Jenner later clarified in a tweet that her account had not been compromised. In a subsequent tweet, she pledged to donate to former President Donald Trump’s campaign if the Ethereum-based JENNER token hit a $50 million market cap, labeling it as “ULTRA MAGA.”
The hype surrounding meme coins shows no sign of abating, but experts are becoming increasingly concerned. They argue that these tokens not only negatively affect the industry but also overshadow the efforts of legitimate projects. On-chain investigator ZachXBT highlighted the issue of meme coin scams, especially those backed by “d-tier” celebrities known for promoting questionable schemes. Despite their controversial pasts, these celebrities still manage to attract support for their new ventures, often leading to pump-and-dump schemes. ZachXBT warned that these celebrities are motivated by easy financial gains, providing little to no value in return.
As the meme coin craze continues to grip the market, it is crucial for investors to exercise caution and conduct thorough research before diving into these speculative assets. While the allure of quick profits may be tempting, the risks associated with meme coins endorsed by celebrities with dubious backgrounds cannot be ignored. It is essential to differentiate between genuine projects with solid fundamentals and mere hype-driven coins that are prone to manipulation. Ultimately, the responsibility lies with investors to make informed decisions and safeguard their investments in the volatile world of cryptocurrency.