WSB Token Team Member Allegedly Dumps Coins

The world of cryptocurrency has seen its fair share of volatile market movements, but none quite as eventful as the launch of the WSB Coin token project. Launched on May 2, by moderators of the popular trading subreddit r/WallStreetBets, the token claimed to be the official memecoin of Wall Street Bets. This subreddit gained notoriety after the GameStop short squeeze, which sent hedge funds reeling in January 2021.

The creators of the WSB token claimed that there would be no allocation for the team and that 10% of the coins would be reserved for the subreddit. The website touted it as the “fairest launch memecoin you will find with no team allocation and no presale. Just a free airdrop and some coins for the community. 10% of the $WSB supply is reserved as a treasury for the r/wallstreetbets sub to do with as they please.”

However, just days after the launch, the cryptocurrency community was hit with shocking news that one of the token’s team members had started dumping massive amounts of tokens. On May 4, on-chain detective ZachXBT tweeted that “zjz.eth,” who runs the moderation bots for the subreddit, had allegedly pulled the rug on WSB investors. According to on-chain data, zjz.eth had sold WSB coins in exchange for 334 Ether (ETH), worth around $635,000 at the time of writing.

The market reacted accordingly, and the token price plummeted from an all-time high of $0.00067279 to an all-time low of $0.00004827 in just two days. Community members were quick to warn others not to buy the dip as the moderators still had access to 10% of the total supply. The incident has raised concerns among the community members, who feel betrayed by the moderators of the subreddit.

Meanwhile, another moderator who goes by the name WSBmod, has threatened to report those involved in the dump to the police and the FBI if they don’t come forward. The moderator urged zjz.eth to return the money and claimed that they had identified the team member responsible for the dump. However, the identity of the team member is still unknown.

This incident is a stark reminder of the risks involved in investing in cryptocurrencies, especially when dealing with new tokens that are not yet widely accepted. The WSB token project had gained a significant following due to its association with the popular subreddit, but the rug pull has left many investors feeling cheated. It remains to be seen what actions the moderators of the subreddit will take to address the situation and regain the trust of their community.

In conclusion, while the cryptocurrency market may offer lucrative opportunities for investors, caution is advised, especially when investing in new and untested tokens. The WSB Coin dump is a clear example of the potential pitfalls that can arise when investing in such projects, and serves as a cautionary tale for investors in the cryptocurrency market.


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Dogecoin price dumps, but whodunnit? Whales, institutions or retail traders?

Most recently, DOGE pulled off a 10x gain as it rallied to $0.74 in the past week. The breakout was fueled mainly by Tesla CEO Elon Musk and his constant mentions of the token on social networks and interviews. Surprisingly, as Musk debuted on Saturday Night Live on May 8, Dogecoin price corrected by 42% even as Musk, his mother, and SNL actors mentioned DOGE in various skits.

This event led to something rather unusual as DOGE traded over $130 billion over the past week, while its market capitalization stands at $65 billion. This raises the question of whether the largest whales were involved or if futures contracts played an essential role in the crash?

Musk’s SNL appearance boosted expectations

Regardless of the world’s second wealthiest person’s motivations, Musk’s Saturday Night Live appearance appeared to have marked a price peak. Most likely, the event was highly anticipated, therefore causing the typical “buy the rumor, sell the news” price action.

It is not clear why the billionaire has taken such an intense interest in DOGE. Some say this trolling reflects just a personal hobby rather than a core belief that Dogecoin can reform the entire monetary system.

DOGE price at Binance, USDT. Source: TradingView

Whatever the case is, Dogecoin’s rally propelled the meme token to the fourth-largest cryptocurrency by market cap, surpassing well-established names such as XRP, Cardano (ADA), and Polkadot (DOT).

Moreover, Google searches for the meme coin managed to surpass the leader Bitcoin (BTC), an absolute victory for its fan base, including Mark Cuban, the owner of the Dallas Mavericks NBA team.

Whales are accumulating, not dumping

Dogecoin is highly concentrated, as the top109 addresses hold 67.4% of the supply. The largest holder is relatively new, created in February 2019. However, tracing previous transactions leads to another address formed in July 2018 and coincides with Robinhood’s DOGE trading launch.

Top-14 Dogecoin addresses. Source: BitInfoCharts

As depicted above, the top-14 addresses added a net 4.66 billion DOGE over the past 30 days. In fact, only the ninth-largest addresses sold coins over the past seven days. Even if one extends the analysis to the top-50 addresses, there has been a 4.36 billion DOGE net add.

Currently ranked as number 21, this address reduced its position by 3.43 billion coins. All of the top-20 addresses from three weeks ago now remain as holders in the top-75 ranking.

Therefore, there’s absolutely no evidence that whales massively reduced their positions as Dogecoin made a 10x gain.

Futures markets also are not to blame

Data also suggests that futures markets did not play a significant role in the most recent price action. If that had been the case, there would have been considerable volume and liquidations.

Dogecoin aggregate futures volumes. Source: Coinalyze

From a volume perspective, there has been a 290% increase over the previous week. Although far from a $54 billion peak on April 16, these derivatives markets could have certainly played a part in Dogecoins’ incredible rally.

However, large volume does not necessarily cause a price impact, let alone a 100% weekly gain. Therefore, one should also analyze liquidations, the orders forcefully executed by derivatives exchanges to close positions whose margin eroded.

Dogecoin aggregate futures liquidations. Source: Coinalyze

A brutal price oscillation on April 16 caused $726 million of both longs and shorts to be liquidated, as shown above. Over the past week, more longs have been liquidated than shorts, which signals that the upwards move did not catchsellers off-guard.

The $340 million worth of buy orders caused by short sellers’ forced liquidations over the past week seems small considering the $28 billion average daily futures volume.

Therefore, this movement seems entirely retail-oriented as there are no signs that the top-50 addresses exhibited unusual activity, nor have there been large liquidation orders in the futures markets.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Since the start of 2021, Dogecoin (DOGE) has sat in the spotlight as its growing community of retail and business-class level supporters have orchestrated a coordinated push to send the popular meme-coin to the $1 level.