Squid, the latest “meme coin” sensation in cryptocurrencies inspired by the Netflix hit series “Squid Game”, lost all its value on Tuesday in what major news publications called an “apparent scam”. It would seem like the incident is part of a scam, commonly known as “rug pull” by cryptocurrency investors, in which the promoter of such a digital token forcibly puts a stop to all trading activity and flees with the money raised from sales. Once investigators confirm the scam, it would come as an alarming event in a world that is increasingly trying to profit off the bull market of ‘meme coins’, including some popular ones like Shiba Inu coin and Dogecoin, without necessarily a complete idea of how cryptocurrency investing works.
“Meme coins” such as Dogecoin and Shiba Inu have recently surged, often for no particular reason, drawing in investors with an expectation of high returns. Squid, another in this series of meme coin sensations, surged more than 230,000% in the past week to $2,861.80, according to CoinMarketCap pricing — only to plunge 100% to less than half a cent as of Monday in New York.
Now, according to the technology website Gizmodo, Squid’s developers have fleed with an estimated $3.38 million (£2.48m).
Squid was part of what is known as “play-to-earn” cryptocurrency, where people buy digital tokens to use in online games. These tokens can later be exchanged, either for different cryptocurrencies or national currencies. This particular cryptocurrency was being used for an online game inspired by the Netflix series, which in itself is about people forced to play deadly games for money.
In a market as untamed, sprawling, and speculative as that of crypto, big gains aren’t always a given, but it still draws in thousands of investors looking to make a quick buck, especially considering the fact that the inflation in value is often ephemeral.
“Betting on the right coin can lead to jaw-dropping riches,” Antoni Trenchev, co-founder of crypto lender Nexo, told the Bloomberg news agency in an email on Sunday. “The problem is, what goes up in a straight line tends to retreat in a similar fashion. You hear that some meme coin investors don’t care about the losses. They are in it for the ride, but once the selling starts, a cascading effect can play out, so it’s wise to only use the money you can afford to lose.”