Lark Davis has issued a warning about the meme and celebrity coin trend, calling it a risky proposition. Traders would do well to be on their guard, he says, as the tokens in this space are all too frequently vehicles for scams or abrupt collapses that can see millions of dollars vanish in short order.
How Meme and Celebrity Coins Cause Massive Losses
Take the case of the Kimchi token: a repost on social media was enough to spark a run on it, putting $14 million of value into the token in just ten minutes, Davis notes. But with the post’s deletion came an almost immediate devaluation; Kimchi was down 98%. He is quick to add that one does not have to look far for a precedent, citing another token that fell 80% in similar fashion. The kind of volatility on display is perilous for the average trader.
Who Really Profits From Meme Coin Hype?
The figures from BitQuery bear this out: some 74 percent of typical Solana buyers of a new meme token will lose money. “You will find the ones who make money are the token’s creators or those who get in at the very start,” says Lark Davis, “the rest are left holding the bag.” And there is profit to be made from it; Pump Fund and others are pulling in millions a day and have a stranglehold on close to 70% of Solana’s fees. Even in the wake of something like the Kimchi crash, they are unbothered and continue to amass large profits from the less experienced.
Safer Alternatives: Solana and Regulated Platforms
Davis would advise anyone seeking a sounder investment to focus on the Solana blockchain and its stablecoins, Athena’s USDE for instance, which carry none of the risks of the latest celebrity token. Then there is Hyperliquid, a newcomer on Solana that is seeking a CFTC license to bring some regulation to crypto derivatives. For an investor looking for a product with more transparency and safety, that should be of interest.
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