The dynamic cryptocurrency market continuously churns out new trends (organic and not-so-organic), with the recent surge of celebrity-backed meme coins being a prime example.
Most avid users of digital wallets witnessed the initial excitement surrounding these tokens, like JENNER, RICH and BANDO.
Fueled by the meme coin craze and celebrity endorsements, these tokens experienced a surge in trading activity. However, the dream quickly turned sour.
Within a mere two to three days of launch, the market value of these tokens plummeted dramatically, with some experiencing dips close to 90%.
JENNER by Caitlyn Jenner, for instance, launched with a market cap that briefly touched $43.3 million but now sits at a meager $5.6 million, marking an approximate 87% decline.
Similar stories unfolded for RICH from Rich the Kid (originally valued at $5.3 million, now at $237 thousand) and other celebrity-backed coins like the mentioned BANDO from Trippie Redd, or DAVIDO (Davido), and MOTHER from Iggy Azalea.
Speaking about the dramatic price drops the threadbare inherent volatility of the crypto market is now heavily influenced by news-driven sentiment and speculation.
Early investor exits to secure profits can trigger rapid sell-offs, especially when a coin lacks liquidity, which is common for meme coins.
Building beyond the buzz
While the recent crash highlights the risks associated with meme coins, I believe there’s potential for successful projects.
Meme coins thrive on community consensus, much like dedicated fan bases.
Celebrities wield considerable influence, and their involvement could be leveraged to launch projects with high potential.
A successful celebrity-backed meme coin could pave the way for wider crypto adoption, similar to the ‘NFT summer’ phenomenon, where celebrities sparked mainstream interest in digital assets.
However, a critical distinction exists between hype and substance. Can celebrity involvement alone translate to long-term success?
The answer lies in a combination of factors. Successful meme coins will need more than just a celebrity name attached.
Clear utility, a strong development team with a proven track record and a dedicated community are crucial for sustained growth.
A bit more on this below.
Utility
What problem does a meme coin solve? Does it offer unique features or functionality within DAO or the metaverse?
Dogecoin, for example, is considered a meme coin, but it has also established itself as a viable medium of exchange for some online transactions on social media, for instance.
For a meme coin to achieve long-term success, it needs a clear purpose that goes beyond simply being associated with a celebrity.
Development team
Who is building the project? A strong development team with experience in blockchain technology is essential.
Look for teams with a history of successful projects and a clear roadmap outlining the coin’s development goals.
Community
A strong, engaged community is essential for any cryptocurrency project.
Look for projects with active social media channels, forums and discussions where the community is actively involved in the project’s future.
A passionate and engaged community can help promote the coin and provide valuable feedback for development.
Fleeting celebrity endorsements shouldn’t sway investors. Researching the project’s fundamentals tokenomics (distribution and use of tokens), roadmap and development team is crucial before investing in any meme coin or any cryptocurrency for that matter.
The future of celebrity meme coins
The recent crash serves as a cautionary tale for investors considering meme coins based solely on celebrity hype.
However, the potential for successful meme coins with real-world utility and strong communities shouldn’t be entirely discounted.
As the crypto market matures, we may see more celebrity-backed meme coins that offer genuine value propositions and contribute to wider crypto adoption.
If we focus on fundamentals, foster strong communities and prioritize long-term utility over short-term hype, the future of celebrity meme coins and meme coins in general can be brighter.
Alvin Kan, COO at Bitget Wallet, is a distinguished figure in the Web 3.0 space. He brings a wealth of development and managerial experience to Bitget Wallet. In 2022, Binance recognized Kan with the Binancian Star Award for his exceptional role in propelling the growth of the BNB chain, which has become an indispensable part of the Binance ecosystem.
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