Crypto currencies are one of the riskiest investments you can make – due to various headwinds that can happen at any point in the industry.
In 2021, there’s been a fair share of volatility – but some major cryptocurrencies including Bitcoin and Ethereum have enjoyed some nice gains. 1 Squid Game operators recently ran a $3.38million scheme This year has also been the year of the meme coin – with Dogecoin and Shiba Inu leading the way.
But just recently, the people behind the cryptocurrency Squid Game reportedly scammed users of an estimated $3.38million.
The price of Squid Game, which once traded as high as $2,861.80 on Monday, has tanked and is now seeing multiple zeros.
This is commonly known as a “rug pull”, which is when creators of a cryptocurrency quickly cash out their coins for real money.
Before you invest in cryptocurrencies, you’ll want to be aware of multiple factors including lessons to be learned from the Squid Game fiasco.
We explain them below.
1. Grammatical mistakes
Some could have seen the Squid Game fiasco coming if they looked at the coins’ in depth-report known as the white paper.
The white paper showed multiple grammatical and spelling errors.
That should draw concern right away – especially when Squid Game’s token was registered just last month.
“Go the website of the coin or token and read the whitepaper,” DeFi, and NFT expert Rio Rocket told The Sun.
“If there isn’t one or it is poorly written then avoid investing in that offering.”
Another way investors could have seen this coming was due to limited information about its executives.
For instance, its chief executive officer claiming to be David Kanny does not come up on LinkedIn.
Squid Game’s website, which is now unavailable, claimed that he was a University of California Irvine alumni with five years of working experience at Netflix.
Moreover, its other executives Kevin Sam, Daniel Jolia, Mabel Jah, among others, failed to come up in a Google search.
Ideally, you’ll want to google executives and check out their LinkedIn profiles or Twitter accounts to confirm they are who they say they are.
“Arm yourself with proper education and research,” Chris Kline, chief operating officer and co-founder of Bitcoin IRA told The Sun.
“That should be our take-away from this experience.”
3. Media reports
You also need to check for media reports if you aren’t sure about investing in cryptocurrencies. Gizmodo was one to call Squid Game an “obvious scam,” pointing out the white paper’s poor grammar.“The single largest red flag is the fact that people can put money in, but can’t take it out,” the online magazine wrote.CoinMarketCap also issued a warning that people couldn’t cash out.
4. Meme coins
Also, be careful about investing in meme coins, as these usually do not gain on fundamentals.A meme coin typically gains off a social media or an internet-based joke.Billionaire Elon Musk has taken part in the meme coin rally – helping drive up the prices of Dogecoin and Shiba.Although Dogecoin and Shiba are jokes, they are said to be legit unlike Squid Game, which is based on the popular Netflix show.However, you’ll still want to keep in mind that value meme coins could tumble if the internet loses interest.
5. Pumping and dumping
Pumping and dumping is a common scheme pulled off in the crypto space that you need to look out for.The scheme aims to drive up the price of a security while spreading false or misleading information.This is a scheme that can be conducted by any individual coin holders so their value goes up and they can sell it for as much as possible.This of course was not the case in the Squid Game scam.Instead, a”rug pull” scheme was used – which happens when the operator of the coin does not allow holders to sell and draws in buyers to run away with profits.
6. Prices and volatility
But the most common thing to look out for is extreme volatility.This makes every cryptocurrency from Bitcoin to Dogecoin risky because of how much money you could lose quickly if you’re not careful.For instance, with Shiba, up until recent days, its previous all-time high was $0.0000388 in May.However, it plunged 85% from that point in July.Larger cryptocurrencies with strong fundamentals including Bitcoin are seen as “safer” bets in the crypto space, although you could still lose it all.This is because of their proven track record of annual returns.However, “volatility is inevitable in this young crypto space,” according to Mr Kline.“It’s important to remember that Bitcoin, the […]