Crypto trader loses $16 million after a $17 million bet on this token 
Cryptocurrency Sep 9, 2024 Share
As the cryptocurrency market undergoes notable capital outflows, specific coins have recorded standout price drops, leaving most investors in the red.
For instance, pseudonymous cryptocurrency influencer Machi Big Brother has incurred losses running into millions of dollars, according to an analysis by Lookonchain shared in an X post on September 9.
The analysis pointed out that the influencer’s bet on the SocialFi project Friend.Tech (FRIEND) has resulted in losses of $16 million. Although the time of the initial investment has not been revealed, Machi Big Brother spent around 5,200 ETH, equivalent to $16.7 million, to acquire 11.1 million FRIEND tokens.
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Following FRIEND’s ongoing sell-off, on-chain data indicated that the investment has plummeted to $0.7 million.
Machi Big Brother FRIEND wallet. Source: Lookonchain
Indeed, this is not the first time the influencer has made notable losses in the token. As reported by Finbold back in June, Machi Big Brother began actively purchasing FRIEND in early May, and as of June 8, he had spent $15.6 million, reflecting losses of $7.9 million.
Why FRIEND is down
It is worth noting that the ERC-20 token plunged following a series of decisions by the Friend.Tech team. Notably, the team resorted to abandoning its smart contract control, which meant they are ceasing operations within a year of the platform’s launch.
The September 8 transfer saw the management move their smart contracts’ control to the Ethereum (ETH) null address, highlighting the complete cessation. This move essentially suggests that Friend.Tech will no longer be able to perform basic tasks such as fixing bugs or improving features on the platform.
Indeed, the platform was launched to enable users to buy and sell shares of social media profiles.
As of press time, FRIEND was trading at $0.0619, reflecting losses of 52% within a day. The token is down by a massive 80% on the weekly chart.
FRIEND one-week price chart. Source: CoinMarketCap
Questions about FRIEND’s sustainability
Overall, the losses experienced by the influencer generally highlight the volatility in the cryptocurrency market and the need for research before investing.
However, in the case of Friend.Tech, centralization is likely the main contributor to the current state, as the platform lacks a community-driven narrative that could have influenced the decision to give up control of the smart contracts.
In this regard, a section of the market is suggesting that the losses could be equated to a rug pull, considering that venture capitalists backed the project.
[most] VCs and influencer cartels are leeches on almost every major dAPP launch on any chain, not just ETH/L2.
But don't blame only VCs. We as a community asked for this:
WE aped into $APE
WE aped into $BLUR
WE aped into $FRIEND
WE aped into $BLAST
We aped into every…— PAPI (@1MrPapi) September 6, 2024
Overall, whether FRIEND will recover with community support or continue to sustain losses remains to be seen.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.