Kanye West’s Memecoin Faces Major Losses
Over 51,000 traders have suffered losses from Kanye West’s newly introduced Memecoin, underscoring the risks associated with trading tokens tied to celebrity endorsements that lack real technical utility.
The Yzy Token, connected to Kanye West, debuted on the Solana blockchain on August 21. It skyrocketed by 1,400% in just the first hour, only to drop over 80% shortly thereafter.
According to data from Bubblemaps, more than 51,800 of the 70,200 investors who put money into such celebrity-endorsed tokens reported losses exceeding $1 million.
“Conversely, 11 wallets managed to gain over $1 million,” noted the x platform on Wednesday.
Amidst the significant losses for the majority, a mere 11 out of 70,000 wallets recorded profits, alongside 99 wallets that made over $100,000. This highlights the financial dangers tied to meme tokens reliant on celebrity endorsement, particularly given their lack of underlying blockchain functionality.
Currently, the Yzy Token is over 80% below its peak, with a trading price of $0.5515, based on information from Blockchain Intelligence Platform, for a total of 19,531 token holders.
Former kickboxing champion Andrew Tate was among those trying to profit from these celebrity-backed tokens. He reportedly took a short, leveraged position three times with the Yzy token, resulting in a total loss of $700,000 linked to his high-risk accounts, as reported by Cointelegraph.
New Insights on Yzy Token
Following the Yzy incident, Hayden Davies—co-creator of the Melania Meme and Libra Token—was identified as a possible insider by the blockchain data platform.
Davies regained access to $57.6 million in USDC that had been frozen due to the Libra Token scandal, as reported by Cointelegraph.
“Despite the hard work from investigators and the community, we see the same names repeatedly involved in fraud,” the x platform commented on Wednesday.
“The following day, Davis (Kelsier) profited $12 million from the Yzy launch.”
“Naseem, known for making $100 million from Trump, was part of a network that bought Yzy first, with these high-speed traders often reaping thousands,” the platform added.
Despite some retail successes, many celebrity-backed cryptocurrencies seem unable to maintain momentum or solidify their position as major tokens.
In June 2024, over 30 celebrity-endorsed tokens were launched on Solana, yet prices plummeted by more than 73.23%. Celebrities involved included 50 Cent, Caitlyn Jenner, Iggy Azalea, and football legend Ronaldinho.
Tate also jumped onto the Solana Memocoin trend on June 7, 2024, endorsing over ten tokens, most of which subsequently dropped about 99% in value shortly after his support.
