FOMO Frenzy versus Community Focus – Why Celebrity Meme Coins Need More Than Star Power

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The vibrant cryptocurrency market is continually generating new trends (organic and not-so-organic), with the recent wave of celebrity-backed meme coins being a prime example.

Most avid digital wallet users, like JENNER, RICH, and BANDO, have witnessed the initial excitement surrounding these tokens.

Fueled by the meme coin craze and celebrity endorsement, these tokens have seen an increase in trading activity. But the dream quickly turns sour.

Just two to three days after their launch, the market value of these tokens fell dramatically, with some experiencing drops of almost 90%.

Caitlyn Jenner’s JENNER, for example, launched with a market cap that briefly reached $43.3 million, but is now sitting to a paltry $5.6 million, a drop of about 87%.

Similar stories unfolded for RICH by Rich the Kid (originally valued at $5.3 million, now at $237,000) and other celebrity-backed plays like Trippie Redd’s mentioned BANDO, or DAVID (Davido), and MOTHER by Iggy Azalea.

Speaking of the dramatic price drops – the inherent and threadbare volatility of crypto market is now heavily influenced by sentiment and speculation related to current events.

Early investor exits to secure profits can trigger rapid selling, especially when a coin lacks liquidity, which is common for meme coins.

Building beyond the buzz

Although the recent crash highlights the risks associated with meme coins, I believe there is potential for successful projects.

Meme coins thrive on community consensus, as do dedicated fan bases.

Celebrities exercise considerable influence and their involvement could be used to launch projects with high potential.

A successful celebrity-backed coin could pave the way for broader crypto adoption, similar to the “NFT summer” phenomenon, where celebrities sparked mainstream interest in digital assets.

There is, however, a crucial distinction between hype and substance. Can celebrity involvement alone translate into long-term success?

The answer lies in a combination of factors. To be successful, meme pieces will require more than just a celebrity name.

Clear utility, a strong development team with proven experience, and a dedicated community are essential for sustainable growth.

A little more about that below.

Utility

What problem does a meme coin solve? Does it offer any unique features or functionality within DAO or the metaverse?

Dogecoinfor example, is considered a coin, but it has also established itself as a viable medium of exchange for certain online transactions – on social media, for example.

For a coin to be successful in the long term, it must have a clear purpose that goes beyond simply being associated with a celebrity.

Development team

Who is building the project? A strong development team experienced in blockchain technology is essential.

Look for teams with a history of successful projects and a clear roadmap outlining the development goals of the piece.

Community

A strong and 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 future of the project.

A passionate and engaged community can help promote the piece and provide valuable feedback for development.

Fleeting celebrity endorsements should not influence investors. Researching the fundamentals of the project – tokenomics (token distribution and usage), roadmap and development team – is crucial before investing in any coin or cryptocurrency for that matter.

The Future of Celebrity Coins

The recent crash serves as a cautionary tale for investors considering coins based solely on celebrity hype.

However, the potential for successful meme pieces with real-world utility and strong communities should not be entirely discounted.

As the crypto market matures, we may see more celebrity-backed coins that offer real value propositions and contribute to broader crypto adoption.

If we focus on the fundamentals, foster strong communities, and prioritize long-term usefulness over short-term hype, the future of celebrity meme coins and meme coins in general can be better .

Alvin Kan, COO at Bitget Wallet, is a prominent figure in the Web 3.0 space. He brings rich development and management experience to Bitget Wallet. In 2022, Binance awarded Kan the Binancian Star Award for his outstanding role in growing the BNB chain, which has become an indispensable part of the Binance ecosystem.

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Disclaimer: Opinions expressed on The Daily Hodl do not constitute investment advice. Investors should conduct due diligence before making high-risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and transactions are at your own risk and any losses you may incur are your responsibility. The Daily Hodl does not recommend the purchase or sale of cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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