Elite Traders Extract $24.5 Million as Kanye West’s YZY Token Crashes 74%
Kanye West's latest foray into crypto with the YZY token has left regular investors with big losses, while a small number of savvy traders
Quick overview
- Kanye West's YZY token saw a dramatic 1,400% price increase before plummeting 74% within 24 hours, resulting in significant losses for retail investors.
- Only 13 wallets made over $24.5 million in profits, highlighting a pattern of insider trading and market manipulation among early buyers.
- The situation has reignited calls for regulatory oversight in the memecoin market, as celebrity-backed tokens often benefit insiders at the expense of regular investors.
- YZY's market cap has fallen to nearly $210 million, raising concerns about the fairness and safety of celebrity cryptocurrency initiatives.
Kanye West’s latest foray into cryptocurrencies has left regular investors with big losses, while a small number of savvy traders made millions. The YZY token, which was released on the Solana blockchain on Thursday, has become the subject of controversy after data showed that only 13 wallets made more than $24.5 million in earnings following a coordinated dump.
The debut of the token followed a pattern that has hurt several famous memecoins. In its first hour, YZY’s price shot up an unbelievable 1,400%, peaking at $3 and giving it a market valuation of $2.04 billion. But the happiness didn’t last long. The coin fell 74% in value to about $0.77 in less than 24 hours, leaving thousands of retail investors with big losses.
The Sniper Elite
Blockchain analysis company Nansen found out how the coordinated extraction worked. The top 13 wallets each made more than $1 million in profit. “Naseem,” the token’s first buyer, was the most successful trader. This same dealer had already profited more than $100 million from the TRUMP memecoin and is connected to a number of well-known token releases.
Naseem’s plan was very precise, like surgery. The trader bought $250,000 worth of YZY tokens just after they came out and rapidly sold some of them for a $800,000 profit, keeping about $600,000 worth of tokens. This pattern shows not only opportunistic trading, but also a deep understanding of when the launch will happen and what the contract details are.
The amount of money that YZY has is mind-boggling. According to current data, the top four wallet addresses control 95.17% of the total supply. This means that most of the tokens are still held by early insiders instead of the larger population that West said they were serving.
Retail Traders Face Devastating Losses
While insiders were happy about huge returns, regular investors lost a lot of money. The person who lost the most money lost $1.8 million, while the next wallet lost $1.2 million. One trader still has YZY tokens, even though they have lost more than $800,000, which shows how different insider earnings are from retail losses.
At the time of the investigation, just nine of the first 99 addresses that bought YZY still had any tokens. This suggests that early informed buyers swiftly sold their shares, leaving later retail buyers with worthless assets.
Celebrity Token Rug Pulls: A Pattern of Exploitation
The YZY mess is the most recent in a long line of celebrity memecoin launches that have all gone wrong in the same way. Haliey Welch’s HAWK token, which she promoted on TikTok, lost 90% of its value within hours of its December launch. Other similar schemes utilizing Kim Kardashian, Iggy Azalea, and Lindsay Lohan have all cost retail investors a lot of money.
Bubblemaps, a crypto data supplier, said that the scenario was “coordinated market manipulation,” adding that “there’s an elite group of snipers who don’t compete but coordinate, making millions destroying charts.” The company’s research found links between several wallets involved in YZY and other launches that caused problems in the past. This suggests that there is an organized group of insiders.
Regulatory and Market Implications
The YZY situation has brought back up the need for more oversight in the memecoin market. Critics say that tokens backed by celebrities are sold as ways to foster community, but they really just move money around to enrich insiders at the expense of regular people.
Arthur Hayes, one of the founders of BitMEX, tweeted, “Oopsie… fam, next time please don’t let me trade shitters like YZY.” This summed up what a lot of retail traders were feeling. Should have just kept two-stepping.
YZY is still trading, but its market cap has dropped to almost $210 million. This occurrence is a clear warning of the hazards that come with celebrity-backed cryptocurrency initiatives. The pattern set by YZY and other comparable tokens raises serious questions about market fairness and how to safeguard retail investors in a world where coordinated trading methods are becoming more and more complex.
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