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Insider Sell-Off Crashes Another Memecoin as WSB Coin Drops 90%
You’ve heard of altcoin season, but now it seems that the cryptocurrency market is currently in the middle of something a little different: meme coin season. Yes, first there was the rise and rise of Pepe (PEPE), which gained by over 7,000% last week before falling by nearly 50% from its ATH. And now it’s the turn of WSB Coin (WSB), another meme token that claims it’s the “official unofficial” cryptocurrency of the r/wallstreetbets subreddit responsible for sending GameStop stock skyrocketing in 2021.
Unfortunately, WSB’s time in the sun appears to have actually ended already, with the coin down by more than 90% since reaching an all-time high of $0.00067279 on Tuesday May 2. Despite generating lots of buzz when it first emerged with the apparent blessing of three r/wallstreetbets moderators, it plunged after an insider dumped a large quantity of the token on the market, and while other team members are trying to resuscitate it, things don’t seem to have recovered.
But fear not, because while the trend for WSB Coin seems to have been very short lived, the market is currently flooding investors with a wave of other meme tokens. From a variety of SpongeBob Squarepants cash-ins to cryptocurrencies based on Winnie the Pooh and the Bogdanoff twins, there’s no shortage of meme-y digital assets pumping right now. Of course, the real question is for how long they can be expected to pump, and whether they’re really worth the risk.
WSB Coin Tries to Take Over from Pepe Coin… And Fails
We covered PEPE in a previous article, and while we raised serious red flags regarding the cryptocurrency and its entirely anonymous founders, it’s interesting to note that the meme token has now developed something like a life of its own. It has received listings from OKX and Binance, among others, and currently boasts over 100,000 holders.
As such, it’s entirely understandable that other ‘entrepreneurs’ have decided to jump in with their own meme tokens in recent days and weeks. As noted above, the most notable example was WSB Coin (WSB), which described itself as “the only coin that is actually associated with the r/wallstreetbets subreddit.” Its basis for claiming this was that 10% of its supply (69.42 billion WSB) was allocated to the r/wallstreetbets treasury, and that 5% was allocated to moderators. Both of these allocations were held in multisignature wallets controlled by two current moderators of r/wallstreetbets and one former moderator.
Of course, just because 15% of WSB’s supply was essentially given to three moderators doesn’t necessarily mean that these same moderators are the token’s actual founders. Still, this didn’t stop WSB from mooning for a brief period, with the cryptocurrency posting a gain of more than 8,000% in about 24 hours, when it listed on Uniswap (on May 2).
CoinGecko has recorded it as reaching an all-time high of $0.00067279, yet this price began to slide downwards in the following hours. Worse still, May 4 brought the news that one of the three moderators — zjz — had “dumped a large portion of the WSB team supply” for $635,000 (334 ETH).
Source: Twitter
This sent the price of WSB Coin crashing, yet things got even worse for the meme token. How? Well, zjz came back and claimed that he drained the funds from the multisig wallet only because WSBMod (a former moderator of r/wallstreetbets and one of the other three wallet holders) was “constantly” giving himself secret airdrops of WSB worth around $25,000 apiece. WSBMod then threatened to turn the police and the FBI, while also denying that he had ever provided himself with personal airdrops.
Regardless of who was telling the truth here, this whole exchange appears to have soured the market’s appetite for WSB. Trust has been lost, as evidenced by discussions of the coin in other subreddits, and despite WSBMod’s efforts in setting up another multisig wallet with other co-holders, the price of WSB Coin has flatlined. As has its trading volume, suggesting that interest in the meme token is pretty much null right now.
WSB’s price since May 2. Source: CoinGecko
Other Meme Tokens Take Up the Challenge
Despite the apparent failure of WSB Coin, traders have other meme tokens to buy if they want to take a big risk that might, if they happen to be very lucky, pay off. Indeed, with the wider cryptocurrency market still basically stagnating in the context of rising interest rates and inflation, it seems that more focus is being placed on meme tokens, which are being increasingly launched by founders in order to take advantage of rising demand.
In fact, at the start of the year meme tokens were the 21st-biggest category of cryptocurrency (in terms of combined market cap), according to CoinGecko. Now, they’re the eighth-biggest, with the number of meme coins being tracked by CoinGecko rising from 105 to 198 in that time.
And what’s interesting (or horrifying) about the current wave of meme tokens, is that they seem to be becoming more ridiculous and self-consciously meme-y with every passing week. This is evident not only in Pepe’s appearance, but also in the appearance of several SpongeBob Squarepants-themed tokens, of which SpongeBob (SPONGE) is currently the most successful. Since CoinMarketCap has been tracking it, it has gained by as much as 3,100%, and is still up by more than 1,600%.
Other new entrants and notable gainers include Chad Coin (up by over 400% from its low), CEO (up by over 160%), Wojak (up by over 800%), Kermit (up by over 800%) and Bogdanoff (up by 1,500%), which is themed on the French Bogdanoff twins who were mostly known for having had extreme plastic surgery.
However, as much as these cryptocurrencies have risen from their record all-time lows, the case of WSB Coin shows that meme tokens must be entered into with extreme caution, if at all. Yes, traders can make a small fortune if they time their entries and exits just right, but they could just as easily have the rug pulled from under their feet by shady founders.
