Rappers Are Trying to Cash in on the Meme Coin Trend
As cryptocurrency continues to reel in many of today’s biggest rappers, the conversation has now shifted from NFT‘s over to meme coins. As big-name rappers begin to hop on the new crypto wave, it’s unclear if these coins have any real value.
So what exactly is a meme coin? Often used to refer to cryptocurrencies involving characters, individuals, animals, artwork or anything else that can be copied, meme coins are enthusiastically traded among traders as part of a fun and light-hearted experience. However, they are often cited as having little to no value and are regarded by crypto traders as highly risky investments if someone wants to make money off them.
The most popular example of a meme coin gone wrong was the infamous Dogecoin which resulted in a $258 million lawsuit against Elon Musk for allegations of racketeering and running a pyramid scheme.
This didn’t stop a growing number of celebrities from flocking to the meme coin earlier this year, including many notable rappers. The initial novelty of the meme coin has definitely worn off in recent months, especially amidst a rise in scams and social media hacks. 50 Cent had his social media account hacked in June by someone claiming the G-Unit leader had created a meme coin. According to Fif, the scammer made off with $3 million in just half an hour before the rapper’s team gained access to the accounts.
Despite the extensive fraud that goes on with meme coins, rappers have continued to buy in to the craze in recent weeks with mixed results. Waka Flocka Flame is currently in hot water after launching his FLOCKA meme coin on June 17. He has since had to address accusations of insider trading after a crypto wallet acquired around 40% of the coin’s supply and distributed it to multiple wallets right after the launch. In a follow-up interview with Decrypt, Waka said instead he merely lost control of the situation.
“I’m gonna be honest,” he said. “F**k it. What happened was we first lost the coin. People sniped 60% of the coin, like 70%. So I was like, hold the f**k up. No, no, no, shut that coin down, really, because I don’t even have any of it. And this is my coin. Hello? That’s my narrative. That’s not cool.”
The week of July 1, the coin was up 8% and is currently down 53% from a mid-June peak of $2 million. It is now currently valued at around $174,000 and continuing to lose value rapidly. Sexyy Red is facing a similar situation after announcing her PRESI coin on July 1. Her team reportedly bought, or “sniped” as it’s referred to in the crypto community, over 90% of the coin. The meme coin skyrocketed in value from 0.000045 SOL (SOL) (approximately $0.0067) to 0.01 SOL ($1.48) per coin in the first 75 minutes after launch. The value of the coin plummeted almost immediately by more than 50%, falling to 0.0042 SOL ($0.62) per coin. Lil Pump also faced allegations of running a pump-and-dump scheme with his lilpump meme coin, which began trading on June 13.
Rap fans are also willingly investing in these coins even if it’s unclear whether or not the rapper is attached to them. A meme coin called Eminem‘s Spaghetti (EMINSPAG) exploded in value when it was announced back in June, despite Em never claiming the coin was endorsed or created by him. The coin’s price skyrocketed 14,000%, with the meme coin at its peak being valued at over $6,000.
While meme coin is undoubtedly fraught with issues, some rappers have benefitted from the new crypto wave. Iggy Azealia‘s MOTHER meme coin skyrocketed in value after the Australian rapper announced it in June. She cashed out after reportedly making $194 million in just one week.
Fraud aside, the meme coin venture in and of itself is just proving to not be lucrative. Lil Reese announced a MONEY meme coin earlier this month, and at its peak was reportedly only worth $35.
It’s more than likely this meme craze will burn out like the NFT trends that came before it. The issue with this trend is how many people will get ripped off before it comes to an end?