Kanye West’s Solana-based memecoin YZY has created both life-changing profits and catastrophic losses of capital in the crypto space.
According to blockchain analytics firm Nansen, 13 wallets cumulatively profited over $24.5 million by dumping the token right after it was made available to trade.
Each of those wallets individually booked more than $1 million, showing how fast early purchasers were able to take advantage of the craze.
The $YZY token shot up by more than 1,400% in the first hour of trading, reaching a high of $3 and then crashing back down thereafter. Within just 24 hours, YZY had lost 42% of its value, settling at just under $0.66.
Trades Highlight Controversial Insider Trading
The $YZY memecoin launch sparked controversy immediately, as many observers pointed to alleged insiders taking part in the action and the coordinated trading.
Dune Analytics showed that over 56,000 wallets interacted with the YZY token in the debut phase of the project, while Nansen confirmed that at least 27,000 wallets still held $1 or more of YZY at the reporting time.
Insider early dumping appeared present: out of the first 99 wallets that purchased YZY, only 9 were still holding YZY when I did the reporting on this token.
The pattern raises alarm bells about predatory trading behaviour that has cropped up with more frequency across TikTok-fueled celebrity meme tokens.
Adding to the $YZY market unfoldings, UnoCrypto reported earlier today that controversial influencer Andrew Tate also joined the action, profiting $16,000 by shorting the YZY token during its volatile debut.
Profits and Losses Expose Market’s Winners and Losers
While the top traders walked away with millions in profit, not everyone came away unscathed, either.
According to Nansen data, the largest losing wallet realized a loss of $1.8 million, and another wallet saw a loss of $1.2 million.
One investor, who is still holding on to their YZY tokens, is now faced with an unrealized loss of more than $800,000.
These numbers highlight how extreme volatility, in which insiders and more experienced traders can instantly turn profits and retail investors who buy in last, hoping to ride the hype, experience significant losses, is part and parcel of memecoin launches.
Also Read: Crypto Trader Faces $1M Loss In Hours After Opening $2.5M $BERA Memecoin Long Position
Elite “Sniper” Groups Raise Further Questions
To add insult to injury, alongside the data and findings, crypto tracking platforms, Bubblemaps, and independent blockchain sleuths found evidence of colluding insider actions.
Bubblemaps found that the first YZY buyer was one of the most notorious, best-remembered “snipers,” who had also gained millions from the Trump memecoin.
They also investigated and shared that an elite sniper group, which included an operator linked to the very controversial LIBRA token, was involved in group token accumulation and dumping actions.
“Dethtective,” a blockchain detective, alleged that these celebrity-linked tokens have less to do with onboarding new crypto users and more to do with monetizing wealth back to already wealthy asset holders.
Also Read: Memecoin Trader Loses $522K From $1.6M $JellyJelly Position as Token Price Plunges 50%
Meme Coin Cycle Demonstrates Patterns of Cash-Outs
The YZY token release resembles a larger trend within the memecoin space where tokens related to celebrity or hype influencers spike, only to rapidly crash once insiders cash out.
UnoCrypto reported on the LIBRA token in February, where 11 early investors made $43.8 million shortly after selling off at launch, with retail investors left holding the bag when the token plummeted 85%.
Currently, YZY is trading at $0.6693 and has a market cap of $86.6 million with a 24-hour trading volume of more than $116 million.
Short-term volatility aside, the memecoin phenomenon continues to draw crowds, although critics have started to say it is not about sustainable innovation anymore, but groups taking advantage of the pump-and-dump cycle.