As cryptocurrencies continue to attract many of today’s biggest rappers, the conversation has now shifted from NFTs to meme coins. And as popular rappers begin to jump on the new cryptocurrency wave, it’s unclear whether these coins have any real value.
So, what exactly is a Meme Coin? Often used to refer to cryptocurrencies that feature characters, people, animals, artwork, or anything else that can be copied, Meme Coins are enthusiastically traded among traders as part of a fun and lighthearted experience. However, they are often referred to as having little or no value and are considered by crypto traders to be high-risk investments if someone wants to make money from them.
The most famous example of a failed meme coin was the infamous Dogecoin which led to a $258 million lawsuit against Elon Musk over allegations of extortion and running a pyramid scheme.
That didn’t stop a growing number of celebrities from flocking to Meme Coin earlier this year, including several prominent rappers. The initial novelty of Meme Coin has certainly faded in recent months, especially amid a rise in scams and social media hacks. 50 Cent’s social media account was hacked in June by someone claiming that the G-Unit leader had created Meme Coin. According to Fif, the scammer stole $3 million in just half an hour before the rapper’s team was able to access the accounts.
Despite the widespread scams happening with meme coins, rappers have continued to buy into the coin in recent weeks with mixed results. Wacka Flocka Flame is currently in major trouble after launching the FLOCKA meme coin on June 17. Since then, he has had to deal with insider trading allegations after a crypto wallet took around 40% of the coin’s supply and distributed it to multiple wallets immediately after launch. In a follow-up interview with Decrypt, Wacka said he lost control of the situation.
“I’ll be honest,” he said. “Damn it. What happened was we lost the coin first. People stole 60% of it, like 70%. So I said to myself, stop it. No, no, no, stop this coin, really, because I don’t have any. And this is my coin. Hello? This is my version. This is not cool.”
In the week starting July 1, the coin surged 8% and is now down 53% from its mid-June peak of $2 million. It is currently valued at around $174,000 and continues to rapidly lose value. Sexyy Red is facing a similar situation after announcing its PRESI coin on July 1. Its team reportedly bought, or “bought” as it is referred to in the crypto community, over 90% of the coin. The value of the Meme Coin skyrocketed from 0.000045 SOL (SOL) (around $0.0067) to 0.01 SOL ($1.48) per coin in the first 75 minutes after launch. The coin’s value almost immediately dropped by over 50%, falling to 0.0042 SOL ($0.62) per coin. Lil Pump has also faced accusations of running a pump-and-dump scheme using his lilpump Meme Coin, which began trading on June 13.
Rap fans are also willing to invest in these coins even if it’s unclear whether the rapper is associated with them. A meme coin called Eminem’s Spaghetti (EMINSPAG) skyrocketed in value when it was announced in June, even though Em has never claimed that the coin was endorsed or created by him. The coin’s price surged 14,000%, with Meme Coin peaking at over $6,000.
While Meme Coin is undoubtedly fraught with problems, some rappers have cashed in on the new cryptocurrency wave. Iggy Azealia’s MOTHER Meme Coin soared in value after the Australian rapper announced it in June. It cashed out after making $194 million in just one week.
Aside from the scam, the Meme Coin project itself has proven to be unprofitable. Lil Reese announced the MONEY Meme Coin earlier this month, and at its peak it was worth just $35.
This meme craze is likely to end like the NFT trends that preceded it. The problem with this trend is how many people will get scammed before it’s over?