New Delhi: Squid Game — a cryptocurrency named after the survival drama on Netflix — surged as much as 2,30,000 per cent in a week but its entire value now stood at a mere $0.003227.
The SQUID token turned an investment of Rs 1,000 into Rs 23 lakh within a week. But it could not fetch even a penny about 24 hours after reaching the peak.
“New investors should really be careful before investing in new projects or investing in projects where price swings are dangerously high,” said Sharan Nair, Chief Business Officer, CoinSwitch Kuber. \”Investors must make an informed decision by assessing multiple factors, including the size of the problem a project is solving, the technological superiority, its performance over a period of time, and the community behind it.\”
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Unlike the Netflix drama, Squid Game, which gives watchers a hint of what to expect depending on the signs in the series, investors in the tokens saw their holdings plunge in a jiffy. Experts are using this episode to tell investors that they should be more careful while investing in crypts.
Gaurav Dahake, Founder & CEO, Bitbns, said investors have to be mindful as some tokens were extremely risky. The newer and less popular coins operate on very low liquidity and centralised exchanges do not list them. \”We would always advise investors to avoid market chaos and indulge only in cryptos that are listed on popular exchanges,\” added Dahake.
Analysts said crypto investments have a longer time frame to create wealth and one should stick to cryptocurrencies with strong fundamentals and future use cases. 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, said Avinash Shekhar, Co-CEO at ZebPay. \”Do one\’s own research before investing, and use a rupee-cost averaging approach to build a sustainable long-term investment,\” Shekar added. \”Beware of FOMO, and don\’t let yourself be swayed by hype.\”
The initial hype in any project does not mean the project is sustainable. Investors should back their investments with deep dived homework before riding the bulls.
Vikram Subburaj, Co-Founder and CEO, Giottus Cryptocurrency Exchange, advised investors to apply proper due diligence on new cryptocurrencies. \”Such tokens are also more prone to foul play given the concentration of power with the original developers who can cash out anytime. No top Indian exchange had enabled trading of SQUID.\”
Hitesh Malviya, founder, itsblockchain.com, said the SQUID token was subject to a rug pull — when people behind the project cash in on the success and take away investors’ money. \”Such coins usually have a thin order book that can be manipulated by large buy orders by insiders and whales, and they are the ones who take away the profit and cause massive drops,\” he added.
Leveraged as a “play-to-earn” cryptocurrency, SQUID encouraged people to buy the tokens to participate in games on its platform. As the game grew popular, it ensured more and more investors jumped in.
Sharat Chandra, a Blockchain & Emerging Tech Evangelist, said the Squid token boom and bust highlights the perils of meme coin investing. A couple of red flags went unnoticed. \”It’s time to look at meme coin projects dispassionately and perform due diligence on team and protocols to avoid scams. The anti-dumping technology was the biggest of all tell-tale warnings,” Chandra added. This technology stopped investors from selling their tokens and taking home profits.
( Originally published on Nov 02, 2021 )