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A Warning to Memecoin Investors: How Much Do Whales Own?

Investors should be aware of just how concentrated a token’s circulating supply is. If whales choose to sell their large token holdings, price drops can often follow…

Investing in memecoins is inarguably a very uncertain affair. With little-to-no fundamental value, countless controversies, and driven by speculation, memecoins are perhaps the most risky assets available to the retail investor in today’s cryptocurrency landscape.

However, when combined with the fact that supply of such coins is oftentimes held by a very small number of whale holders, the risks associated with these fun but votilite assets only seems to increase.

Shiba Inu (SHIB)

Including exchange wallets, but barring null/burn addresses, Etherscan shows us that, despite a total holdership of more than 1.3 million addresses, the top 20 SHIB holders currently boast around 27.3% of the tokens supply - equivalent to approximately $1.3 billion, given a market cap of $4.74 billion at time of writing, according to CoinMarketCap.

For context, this equates to just 20 individual wallets with more than 1 in 4 of the SHIB tokens currently in circulation. 

SHIB currently boasts more than 1.3 million holders, despite its top 20 holders possessing more than a quarter of SHIB’s supply. Source: EtherScan

Pepe (PEPE)

In the wake of recent controversy and supposed theft of some 16 trillion PEPE tokens by “bad actor” members of the team, PEPE’s token concentration may seem all the more concerning.

According to data from Etherscan, the top 20 holders of the PEPE token possess some 53% of the circulating supply.

Certainly this monumental percentage includes exchange wallets too which, though distributed across multiple actors, are perhaps more ready to be sold than any other segment of holder.

Top holders of PEPE. Source: Etherscan

Floki (FLOKI)

The top 20 FLOKI holders tout a combined holding of 23% of FLOKI’s supply, barring null/burn addresses. 

What’s more, the total number of holders is significantly less than those of competing memecoins. For context, according to data from Etherscan, FLOKI is distributed across just 73,000 wallets, compared to 1.3M, and 138,000, for SHIB, and PEPE, respectively.

Should I Invest in Memecoins?

Memecoins have gained popularity owing to their historical ability to generate returns and generate them quickly. As a result, the risks associated with these highly speculative assets are often overlooked and so too are their tokenomic details. 

Investors should be aware of just how much market influence a small number of memecoin whales often have - the figures therein are often surprising. Should a single party choose to sell their stacks in short order, the negative impact on the token’s price, as a result of the mass-sale, can be catastrophic. 

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