The cryptocurrency market went through a shakeout, with most cryptocurrencies experiencing a crash in the past 24 hours. A crypto influencer and Ethereum (ETH) supporter currently holds $8 million in unrealized losses with the ERC-20 token FRIEND.
Notably, the pseudonymous influencer Machi Big Brother, with 164,400 followers on X, has over 50% losses with FRIEND. Lookonchain spotted the one-month losing position from the labeled account and reported it in a post on June 8.
Machi Big Brother(@machibigbrother) has been buying $FRIEND since May 3.He has spent 4,975 $ETH($15.6M) to buy 8.6M $FRIEND at an average price of $1.81.At the current price, he lost $7.9M on $FRIEND!https://t.co/j5UByo2jpN pic.twitter.com/tiew7f377A
— Lookonchain (@lookonchain) June 8, 2024According to the on-chain analyst, Machi Big Brother has been buying the token since May 3. Overall, he bought 8.6 million FRIEND for an average price of $1.81. The crypto influencer spent 4,975 ETH, worth $15.6 million, in this investment, currently down 55%.
Friend.tech (FRIEND) one-month price chart. Source: CoinMarketCap
FRIEND and social volume with crypto influencers
The well-known cryptocurrency trader Ansem has defined FRIEND as a meme coin and a “culture coin,” highlighting its ecosystem. Ansem posted this on X on May 4, suggesting he could have been building a position on the token approximately at the same time the other crypto influencer did.
friend token is the first memecoin that is also a culture coin that is also a dex that also has real revenue that is also distributed entirely to the community that is also backed by paradigm pic.twitter.com/bXDeSEaHGS
— Ansem ??️ (@blknoiz06) May 4, 2024Interestingly, the token peaked in social volume and price in early May but never reached these levels again. Data from Santiment suggests FRIEND experienced a brief hype driving its prices and crypto influencers’ interest one month ago. However, this was a short-life surge, which has now been fading away and accumulating losses.
FRIEND price and social volume. Source: Santiment / Finbold (Vini Barbosa, using Sanbase Pro)
Meme coins and the greater fool theory
Meme coins, like FRIEND, come with significant risks that traders must not underestimate due to their speculative nature. These cryptocurrencies often lack intrinsic value, and their prices are primarily driven by social media hype and buzz.
Crypto influencers and traders who invest in meme coins are essentially gambling, hoping to sell at a higher price to others. This mindset aligns with the “Greater Fool Theory,” which suggests profits can be made from overvalued assets. However, this theory also underscores the inherent risk, as the market may eventually run out of willing buyers.
When hype fades and demand wanes, traders can be left holding worthless assets, resulting in substantial financial losses.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
