Just like how the show Squid Game had an unexpected twist, so did it’s cryptocurrency that left investors in shock.
The cryptocurrency was based on the Netflix original show called Squid Game that garnered a lot of popularity. The show depicts a deadly survival game set in South Korea, in which financially unstable players compete and risk their lives. All to win a cash prize worth 45.6 billion won that will clear them of their debt.
Developers of SQUID
Investors jumped at the Squid coin when an unknown developer launched the coin “SQUID” into the market. Sadly, The fortune of the investors was just as bad as the actual players in the game.
On 2nd November, when the SQUID coin hit a high of $2,800, the creators decided to cash out. This was an appreciation of 310,000% since its inception. They sold their holdings, completely shut down their website and became untraceable. As majority of the coin was held by the creators, once they sold it the price tanked back down to $0.
This occurrence is commonly known as a “rug pull”. It basically means the developers pump a new coin as soon as possible to pump the price up exponentially. They then sell their large holdings and run off with the investors’ funds and abandon the project.
There were some very noticeable red flags and cause for suspicion around the whole currency.
The most jarring factor was there was no option to sell SQUID. You could only buy SQUID. The coin was not listed on any trusted exchanges, the only marketplace for it was its questionable website. The website looked extremely unprofessional and had a lot of errors and typos. Furthemore, the Twitter and Telegram channels did not allow any one to comment or engage besides the project creators.
Why it gained popularity
Despite all the very damning evidence, a lot of innocent investors did fall victim to this scam. There are two many reasons. One, the SQUID was introduced as a pay-to-play token for a virtual Squid Games. Coin holders were promised an opportunity to play the game inspired by the show and a shot at some prize money. The rising popularity of the show and cult culture added to the high demand for the coin.
Two, the surging coin and its performance received a massive magnitude of media coverage. People wanted to be a part of this headline story. Any story with “100,000% gain” is enough to catch the investor’s eye.
It is a lessson to all investors. Always beware of such scams in the market. Remember to do your due diligence and research about the project and project developers. Rug pulls are not very common, but buyer beware!
Speculators investing in small-cap meme coins were essentially looking to place a short-term bet based on the continuing popularity of the meme coin in question. Do one’s own research before investing, and use a rupee-cost averaging approach to build a sustainable long-term investment, said Avinash Shekar, Co-CEO at ZebPay.In conversations with The Economic Times