Celebrity memecoins highlight crypto’s influencer problem

Celebrity memecoins are the latest influencer crypto trend, with the likes of Katlyn Jenner and Iggy Azalea recently launching their own memecoins. 

However, like each bull cycle, several celebrity-linked projects have already been accused of retail dumping and scamming unsuspecting amateur investors, highlighting the crypto market’s long-running issue with influencers.

Every bull cycle, celebrities jump on the latest trend.

During the 2017 bull run, various tokens were promoted through celebrity-endorsed initial coin offerings (ICOs), including those from socialite Paris Hilton, boxer Floyd Mayweather and actor Jamie Fox.

The majority of those ICO projects turned out to be duds, with one study suggesting that more than 80% of ICO projects in 2017 were scams. However, most of the celebrities involved got away with a fine for promoting fraudulent projects.

During the 2021 to 2022 bull season, non-fungible tokens (NFTs) and the metaverse were the hot new trends, with many celebrities using the new tech for self-promotion.

Jake Paul, DJ Khaled, David Dobrik and Floyd Mayweather promoted scam NFT projects, and even former President Donald Trump was accused of promoting and launching 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 mainstream popularity.

Several wrongly spelled celebrity meme tokens, such as Doland Tremp (TREMP) and Jeo Boden (BODEN), have also made headlines and were even listed by centralized exchanges.

Toward the end of May, celebrities such as Iggy Azalea, Caitlyn Jenner, rapper Lil Pump and online influencers like Andrew Tate jumped on the memecoin bandwagon as the tokens peaked in popularity.

However, when famous or almost-famous influencers and celebrities enter the crypto space with lofty promises, it often indicates that the market has reached its top.

This has been evident from the recent slump in memecoin volumes and sharp plunge in prices.

According to data shared by CryptoQuant, memecoin dominance in the altcoin market has seen a steep decline starting in mid-May and has plunged in June.

Memecoin dominance chart. Source: CryptoQuant

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 large payout.

“Retail users intending to speculate on cryptocurrency need to be aware that cryptocurrency is volatile, and memecoins, in particular, are extremely volatile, and most fail; in other words, they trend to zero. The involvement of any celebrity or personality that endorses or speaks of a memecoin does not change this fact,” Frizza added.

Celebrity memecoins surge

The celebrity memecoin frenzy started with the American media personality Caitlyn Jenner’s (JENNER) memecoin on May 28.

The token reached a market cap of $40 million within 24 hours of launching despite a bumpy start where many people initially thought the token was part of a deep fake X account hack.

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Rapper Iggy Azalea launched her Mother Iggy (MOTHER) memecoin on the Solana blockchain following the initial success of JENNER. The token’s value soared within weeks. However, the price has fallen significantly over the past week amid ongoing market turmoil.

MOTHER memecoin price chart. Source: CoinGecko

Nigerian musician Davido joined the trend and launched the Timeless Davido (DAVIDO) token. However, some have questioned the project’s validity, claiming it featured a pre-mine and token dump. 

The Rich (RCH) token from American Rapper Rich the Kid also attracted attention from memecoin traders. However, the token has since fallen to a $61,000 market cap, losing over 90% of its value.

Rich memecoin price chart. Source: CoinGecko

Memecoins linked to boxing legend Floyd Mayweather (FLOYD), as well as American rappers Moneybagg Yo (SPEAK) and Trippie Red (BANDO), have also fallen over 90% since they launched.

A troublesome relationship with social media

A common link among the major celebrity memecoin launches is an Instagram influencer named Sahil Arora.

Arora is accused of planning and promoting the launches of celebrity meme tokens, most of which were rug-pulled and vanished. In social media posts, Jenner and Azalea both claimed that Arora “scammed” them.

Arora allegedly played the role of middleman, 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 off his own significant holdings, removing liquidity and sending the token prices plunging.

X eventually suspended his account after multiple accusations surfaced.

Max Jones, the co-founder of Solana-based memecoin launchpad MemePad, told Cointelegraph that celebrity tokens’ rise in popularity is thanks to how they are promoted, with their price depending on the media appearances of the person they represent.

A market this dependent on hype can’t last forever:

“This hyped market will likely face a downtrend 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 that celebrity tokens should be launched on professional launchpads with a sustainable economic model instead of coming out as chaotic, poorly-made tokens. If millions of fans interact with a low-quality project or a scam, “it can turn people away from the token or crypto.” “We would like to see more high-quality projects with regularly updated incentives and use cases,” he added.

Looking back at the series of celebrity memecoin launches over the past few months, barely one or two have managed to hold their value beyond one week.

Apart from Azalea’s MOTHER, most of the tokens have lost more than 90% of their value since launching.

This highlights the bitter truth repeated every bull cycle: influencer culture in crypto comes at a cost to retail traders.

Celebrity memecoins are among the worst crypto trend

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 hard-earned money, hoping to make big returns on one of the hundreds of recently launched memecoins.

However, with celebrity influence, the memecoin world became even more prone to scams as fans put their money into their favorite celebrity’s token without properly understanding the ecosystem.

Ethereum co-founder Vitalik Buterin also slammed celebrity memecoins, claiming the financialization of crypto trends by celebrities is only justified if it serves a purpose that brings 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 from the 2024 celebrity memecoin trend. He said, “At least Stoner Cats funded an actual show, whereas the memecoins lack substance and purpose.”

Source: Vitalik Buterin

Edward Wilson, an analyst at Nansen, told Cointelegraph that memecoins could be a fun way to embrace crypto, but highlighted that not all memecoins are created equal:

“Your ‘blue-chip’ memes, like DOGE and PEPE, serve as a way to tokenize culture, and that’s where the ‘value’ lies. But what we’re seeing in recent weeks with past their sell-by date celebrities are low-tier efforts to extract what little they can from their community to make a quick buck. This is something that has received significant pushback in the crypto community, and rightly so.”

At the peak, crypto influencers created new memecoins by raising funds on X, many of which disappeared with the seed fund. In one such instance, the Slerf memecoin creator accidentally burned $10 million. However, the memecoin was eventually launched and gained a market cap of $500 million.

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The memecoin frenzy has reached such a level that some people have started making memes 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 cap.

Like anything else in crypto, celebrity tokens have a positive and a negative side. On the one hand, such coins allow fans to interact with their role models in a fun way, while artists and athletes strengthen their communities and get increased media coverage. 

On the other hand, the prevalence of scams and substantial price swings are risky and do little to endear crypto to the investing public.