The Collapse of LABUBU Coin and the Meme Coin Chaos: Hype Extraction, Wild Swings, and Investor Traps

#LABUBU #MemeCoin #Meme

LABUBU is a name familiar to many. As a collectible toy IP under Pop Mart, this little “elf” has gained immense popularity worldwide for its unique design. With a vast fan base, many saw in it the same potential as DOGE once had — beloved and viral like the Shiba Inu meme back in the day.

If the project had been led by an idealistic, goal-oriented, and capable team, it might have evolved into another valuable meme coin. Unfortunately, whenever a trending IP, pop culture reference, or internet meme goes viral, there are always “crypto magicians” who instantly launch a copycat coin. They then use social media to rapidly stir up trading hype — only to cash out at the top by preying on emotional investors.

In early June 2025, a meme coin named “LABUBU” exploded into the crypto spotlight, but within just a few days, it had crashed by over 91%, completely shattering many retail investors’ confidence. It also harmed the IP’s public image, as this LABUBU coin was not officially issued by Pop Mart.

Today, we’ll dissect the full story of LABUBU coin, analyze the typical chaos plaguing the meme coin market, understand the speculative mechanisms behind it, and try to answer three core questions:

• Why are meme coins so prone to skyrocketing and crashing?
• Why do so many projects with no real value still attract funds?
• How can ordinary investors identify “fake projects” and avoid getting rugged?
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“Everything Can Be a Coin”: Meme Culture + Speculative Capital = The Rug Formula?

The emergence of LABUBU coin came as no surprise. The LABUBU IP had gone viral across collectible toy circles, with people queuing up at Pop Mart stores both domestically and abroad — it became a “must-have” among young collectors. In crypto, where there’s traffic, there’s opportunity. Soon, a meme coin named “LABUBU” was launched and gained attention on platforms like CoinMarketCap. In just two days, its price soared from around $0.0004 to $0.0045 — a more than 10x increase. But the good times didn’t last. The price then plummeted to about $0.0007 in just a few days, a drop of over 91.66%.

This price pattern has become the standard playbook for meme coins:Hot topic + hype + token launch + pump + dump + collapse.Even more alarming, this “LABUBU coin” had zero official authorization from Pop Mart. It was launched by a group of community developers under the guise of “cultural tribute.” It had no whitepaper, no publicly disclosed team, and no actual product.And yet it still attracted a large influx of capital. This is the essence of meme coins: they thrive on hype, not value.

Let’s break down the logic behind LABUBU coin’s price explosion:

• Hype leverage: The popularity of LABUBU in the collectible scene automatically generated social media buzz.
• Community ignition: Rapid promotion through Telegram, X (formerly Twitter), etc., drawing in early FOMO-driven retail investors.
• Liquidity manipulation: The project team controlled the initial supply, creating low liquidity; even minor buy orders could sharply pump the price.
• Exchange cooperation: Certain small exchanges listed the token quickly and with lax vetting, making it easy for meme coins to go live.
• Cash-out phase: Once the price peaked, core holders sold off and exited, triggering a “stall-out” phase.

In this cycle, early entrants make big profits, while latecomers are left holding the bag.

You might ask: where’s the regulation? Why didn’t Pop Mart take legal action?The problem lies in the fact that most meme coin projects are branded as “community-led,” with no legal entity, no registration address, and even open-source code. This makes legal recourse and accountability nearly impossible.

How to Identify Fake Projects: Don’t Let the Fantasy of Getting Rich Cloud Your Judgment

In the crypto space — especially in the meme coin market — so-called “fake projects” are everywhere. They often wear the disguise of trending IPs or viral memes, but beneath the surface, they have no technology, no product, and rely purely on hype to inflate their bubble. The end result? A price crash, with retail investors taking the biggest hit.For everyday investors, avoiding these traps requires the ability to recognize these fake projects — don’t let the fantasy of getting rich cloud your judgment.

Below, I’ll walk you through multiple angles to help assess whether a project is trustworthy.

1. Check the Whitepaper and Project Overview: Is the Logic Sound?

A detailed, legitimate whitepaper is the bare minimum proof of identity for a crypto project. It should include:

• Project background and vision: What problem is being solved? Who are the target users?
• Technical solution: What blockchain technologies are being used? What are the core innovations?
• Tokenomics: How is the token issued and allocated? Is there a lock-up schedule?
• Use cases and ecosystem roadmap: What can the token be used for — payments, governance, or community participation?
• Team information: Background and experience of the core members — are they transparent and verifiable?

If a project has no whitepaper, or if the content is vague, templated, lacking detail, or clearly copy-pasted — it’s likely a clone coin with no technical or product foundation. Also, watch for logical holes or overblown claims in the whitepaper. For example:A project that says it will “revolutionize the internet” but doesn’t explain how.Or one that promises “1,000,000% annual returns” — obvious scam.

2. Dig Into the Team’s Background: Verify Their Authenticity and Professionalism

The team is key to a project’s success. Here’s what you should do:

• Search LinkedIn, GitHub, and official websites: Check if team members’ professional history is real, and whether they have blockchain experience.
• Be wary of anonymous teams: While anonymity doesn’t always mean fraud, total lack of transparency is a major red flag.
• Watch their public interactions: A legitimate team will engage with the community and respond to questions.
• Beware of fake teams: Some projects use fake photos, fabricated resumes, or even steal bios from other projects.

If you find the team’s information vague or unverifiable — walk away.

3. Evaluate Token Distribution and Holding Concentration

The token’s distribution model reveals how easily prices can be manipulated.

• Token allocation: Legitimate projects lock up a portion of tokens to prevent mass dumping.
• Top holder concentration: If the top 10 addresses hold most of the supply, it’s likely whale-controlled — and one dump could tank the price.
• Liquidity pool lock: A healthy project usually locks its liquidity to prevent the team from pulling funds. No lock = high risk.
• Issuance volume: Watch for unlimited issuance or sudden surges in supply — both are red flags.

You can use block explorers and analytics tools to inspect token holdings and contract details.

4. Analyze Community Atmosphere and Communication Quality

A crypto project’s community is critical — it reflects overall project health.

• Engagement level: Are Telegram, Discord, and Reddit groups genuinely active — or just full of hollow slogans?
• Discussion quality: A solid community talks about tech, roadmap, governance — not just “moon soon” or “100x tonight.”
• Transparency: Does the team regularly post updates and answer questions, or are they evasive and vague?
• Member base: Are there lots of bots or fake accounts? Use tools to detect suspicious activity.

Some projects use bot traffic and fake engagement to create an illusion of success.These are red flags for high-risk investments.

5. Look at the Quality and Credibility of Listing Exchanges

Not all exchanges offer the same level of vetting, but certain top-tier CEXs like Binance, Coinbase, or vetted platforms like SuperEx, have stricter listing standards. While no listing is 100% safe, approval from these platforms generally means lower risk.

• Be cautious of tokens listed only on small exchanges: These platforms often have low listing thresholds, high fees, and may enable fake trading volume.
• Watch post-listing price activity: If trading is highly volatile and concentrated in a few addresses — it may be wash trading.
• Check if the exchange issues risk disclosures: Reputable platforms usually include warnings for new tokens.

6. Check Project Transparency and Audit Reports

• Has the smart contract been audited by a third party? This significantly reduces the risk of bugs or backdoors.
• Has the project published financial or progress reports? Regular reports build trust.
• Is there a clear roadmap with real milestones and timelines?

If there’s no transparency or the team avoids technical questions, you’re looking at a high-risk project.

7. Beware of Pump-and-Dump “Rocket Patterns”

Meme coins often skyrocket after launch, driven by orchestrated FOMO campaigns. This is usually a trap by insiders to bait retail investors in — then dump.

8. Don’t Trust “Insider Info” or “Expert Recommendations”

The crypto space is full of false signals and manipulative narratives. So-called insider tips are often just tactics to attract new money. Even celebrity endorsements can be faked or taken out of context.

9. Practice Rational Investing: Set Stop-Loss and Take-Profit Points

Even if a project seems relatively legit, risk management is still essential. Never go all-in on one project.Diversification protects your capital.Also, set reasonable take-profit and stop-loss levels to avoid emotional decisions.

Conclusion

Spotting fake projects requires multi-dimensional analysis, not blind herd behavior.The key is to develop a rational, independent mindset — don’t let the fantasy of getting rich cloud your judgment.Remember: trading crypto isn’t gambling, but a gambler’s mentality is doomed to fail.

In this market, there are always ways to make money fast — and just as many ways to lose it fast.The more you learn to identify traps, the better your chances of preserving capital and surviving longer in this ever-evolving crypto game.