Tuesday, November 02, 2021
Meme coin cheating
Investors lose millions with squid game currency
Crypto investors invest millions of dollars in currencies that are characterized solely by allusions to popular phenomena from social networks. Investors can make huge profits or lose everything in a very short time on dubious currencies.
The boom in the Squid Game cryptocurrency lasted a few days, and the crash lasted only minutes. Shortly after its introduction last week, the value of such a digital coin rose to over $ 100. The anonymous developers of the currency had borrowed their enormous popularity from the Netflix hit series Squid Game, after which they named their project – without actually having any connection to the series, its creators or the streaming service Netflix. Yesterday, at the beginning of the month, the price literally exploded and reached a high of 2856 dollars within a short period of time, only to fall like a stone unchecked to less than a tenth of a cent within five minutes.
“Pump-and-dump” actions – that is, the heating up of a price with the firm intention of selling the currency in question at an inflated price – are common in the unregulated crypto market. However, the dimension, the speed and the criminal energy of the Squid Coin are remarkable. According to estimates, the makers escaped with the equivalent of 2.5 million dollars in the form of other cryptocurrencies, the traces of which they covered with the help of a special service.
Most astonishing and frightening for some observers is the carelessness with which users put millions into an unknown crypto currency within a few days, mainly because of a popular name. Warnings from the crypto scene that, among other things, the “white paper” in which the makers of the Squid Coin presented their alleged concept was full of errors, did not detract from the hype.
“Intellectually Offensive”
Squid game investors apparently hoped to make quick profits with the help of a meme token, a cryptocurrency based on a topic popular in internet forums and social networks. In comparison with other digital currencies, such meme currencies have no special – at least no credible – utility value, but only serve to speculate on a hype.
The best-known of these meme coins are the Doge Coin, which was developed as a satirical project in 2012, and the newer Shiba Inu Coin. With a market value of $ 36 billion and $ 38 billion respectively, both are now among the top ten cryptocurrencies. The prices multiplied at times within a few days, and investors made gigantic profits in some cases. Which some crypto experts find outrageous. It is “intellectually insulting, so to speak,” to see that a meme coin like Shiba Inu has a higher market value than sophisticated crypto projects in which years of research and development work, Bloomberg quotes Henri Arslanian, crypto expert and partner at the consulting firm PwC.
Doge and Shiba Inu are only the tip of the meme coin iceberg, however. Dozens of new coins have been launched on the market based on the dog meme on which the two crypto currencies are based alone. Elon Musk fueled the hype not only with comments and tweets, but also by getting a Japanese Shiba-Inu dog as a pet. After the dog named Floki, several new crypto currencies, some of which are dubious, have been named, some of which have already reached billions.