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In the world of cryptocurrencies, the promise of rapid rewards has once again resulted in traders suffering terrible losses. The recent implosion of the RTR meme coin (Restore The Republic) is a sobering reminder of the dangers associated with FOMO (fear of missing out).
RTR meme coin’s market cap shot up to $80 million before collapsing abruptly. Within a matter of hours, the cryptocurrency world was left reeling from yet another reminder to DYOR (Do Your Own Research), as fortunes were lost and trust was betrayed.
A Meteoric Rise Fueled by Rumors
The RTR coin launch earlier this week caused quite a stir in the cryptocurrency community. The value of the token quickly increased as rumors circulated that it was connected to the Trump family.
RTR’s price shot up to $0.1095 in just three hours after launch, giving it a market capitalization of more than $100 million. The idea that Eric Trump, the son of former President Donald Trump, supported the token caused a speculative frenzy.
The thrill, though, was fleeting. Eric Trump openly refuted the rumors on August 9, 2024, making it clear that he and his family had no connection to RTR. When traders discovered they had been misled and had purchased the token based on a false association, this discovery sent shockwaves through the market.
The Crash and Burn of RTR Meme Coin
Eric Trump’s remarks had an immediate and negative effect. By August 9 afternoon, RTR had lost about 95% of its value, or $0.009. The market capitalization, which was formerly over $100 million, fell precipitously to $8.88 million. The token’s drop worsened when traders panicked and hurried to sell off their holdings, causing a major selloff.
The losses were enormous. LookOnChain reported that at the height of RTR, one trader had invested 5,800 SOL, or $916,400. Regretfully, in less than four hours, the trader watched the investment drop to just 113.3 SOL, or about $18,000.
Another trader, @IcedKnife, bemoaned having trusted the wrong people when he disclosed on X that he had lost $7 million of his life assets.
just lost $7M
— Iced (@IcedKnife) August 8, 2024
my entire life savings
i trusted the wrong people
goodbye pic.twitter.com/9nc7W6bftm
Perils of Celebrity-Endorsed Tokens
The RTR episode is simply one illustration of the larger problem in the cryptocurrency market caused by celebrity-endorsed coins.
More than thirty tokens backed by celebrities were introduced on Solana just in June, and their prices crashed by as much as 73.23% on all of them. Celebrities who supported the token launch included Barron Trump, Iggy Azalia, Andrew Tate, 50 Cent, and Caitlyn Jenner, who encouraged their friends and followers to invest.
But the situation hasn’t exactly been picture-perfect. The disastrous performance of these celebrity coins was brought to light in an X post by cryptocurrency researcher Slorg, who pointed out that very few had been able to hold onto more than 25% of their value.
“Exactly half are down over 99%, with 7 others being down more than 90%,” Slorg posted. “Let me remind you this is only about a month into their lifespan.”
Avoiding the Next Trap
Experts frequently warn against the dangers of investing in meme coins, likening them to financial bubbles driven by the “Greater Fool Theory.”.
The RTR story emphasizes how crucial due diligence is in the unpredictable realm of cryptocurrencies. As @wiseadvicesumit tweeted, “Beware of such projects and always #DYOR” (Do Your Own Research). Investors need to exercise caution, particularly when handling assets that are the subject of rumors and conjecture. Taking the crowd at face value or succumbing to FOMO can lead to disastrous financial losses.