More than 51,000 traders incurred losses on Kanye West’s recently launched memecoin, highlighting the potential risks of trading celebrity-endorsed tokens with no intrinsic technological utility.
The Kanye West-linked YZY token was launched on the Solana blockchain on Aug. 21. It rallied 1,400% within the first hour before losing over 80% of its value.
Of the 70,200 traders who invested in the celebrity-endorsed token, more than 51,800 realized losses, with three traders losing over $1 million, according to blockchain data platform Bubblemaps.
“Meanwhile, 11 wallets made $1M+,” wrote Bubblemaps in a Wednesday X post.
Amid large-scale losses from the majority of the token’s traders, only 11 out of 70,000 wallets generated over $1 million in profit, while 99 generated over $100,000, highlighting the financial risks of celebrity-endorsed meme tokens with a lack of blockchain utility.
Meanwhile, the YZY token’s price is down over 80% from its all-time high, trading at $0.5515 with just 19,531 traders holding the token, data from blockchain intelligence platform Nansen shows.
YZY/USD, all-time chart. Source: NansenFormer kickboxing champion Andrew Tate was among the traders looking to profit from the rapper-endorsed token. Tate opened a 3x leveraged short position on the YZY token, leading to a total $700,000 loss on the Tate-related Hyperliquid account, Cointelegraph reported on Friday.
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Hayden Davis “sniped” YZY token launch for $12 million: Bubblemaps
Following the YZY incident, the blockchain data platform pointed to Hayden Davies, the co-creator of the Official Melania Meme (MELANIA) and the Libra token, as one of the potential insiders.
Davies received renewed access to his funds on Aug. 21, after a judge had unfrozen $57.6 million in USDC (USDC) stablecoins tied to the Libra token scandal, Cointelegraph reported.
The original complaint filed against Hayden Davis, Ben Chow, Julian Peh and others. Source: PACER“Despite our collective efforts as investigators, builders, and communities – the same names keep running the same scams,” wrote Bubblemaps in a Wednesday X post, adding:
“Naseem: A network of snipers tied to Naseem, famous for making $100M on TRUMP, was first to buy YZY. These snipers are consistently first, printing millions,” added the platform.
Related: Ether trader nearly wiped out after epic run from $125K to $43M
Despite resulting in significant retail interest spikes, most celebrity-endorsed cryptocurrencies fail to gain traction and rise to become large-cap tokens.
Over 30 celebrity-endorsed tokens launched on Solana in June 2024 and have seen prices fall by no less than 73.23%. Celebrities endorsing these tokens included 50 Cent, Caitlyn Jenner, Iggy Azalea and soccer legend Ronaldinho Gaúcho.
Tate also jumped on the Solana memecoin bandwagon on June 7, 2024, endorsing more than 10 tokens, most of which lost around 99% of their value shortly after the endorsement.
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Source: https://cointelegraph.com/news/kanye-west-yzy-token-crash-51000-traders-losses?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
