- January 26, 2022
- Posted by: admin
- Category: Blog
Squid Game is Netflix’s second biggest show at the time of writing (BTW if you haven’t read about it you can do so here!), with about 87 million people finishing the series according to AdWeek. This has led to the rise of the Squid Game Token ($SGT), which had promised investors an app-based rendition of the original Squid Game games, where competitors put tokens into a price pool and contest for that whole pool, similar to the big piggy bank in the original series. However, in early November, $SGT had appeared to have been abandoned, with the developers citing negative press remarks and difficulties dealing with scammers.
However, upon deeper investigation, it becomes apparent that $SGT had been allegedly rugged by its developers. While unconfirmed, a BscScan data search found that a wallet had dumped SQUID tokens and ran away with millions of dollars worth of Binance coin, the native coin of Binance Smart Chain, upon which $SGT was based upon. Investigations are currently being conducted on the developers’ disappearance and abandonment of the project.
Sadly, $SGT was just one of many instances of rug pulls and scams in cryptocurrencies. Tokens are especially susceptible to scams due to their relative ease of setting up as compared to coins. These events have led to crypto having a bad name to the general public, with people citing frequent scams and rug pulls as to why they’ll never invest in cryptocurrencies. However, even within the crypto world, this has led to questions as to whether tokens are dangerous to invest in? Let’s take a look at whether crypto tokens are really dangerous to invest in!
Cryptocurrency can be a dangerous world to put your hard-earned money into if you don’t fully comprehend the risks and only focus on the rewards. The wealthy and the famous are starting to take pride in their crypto portfolios, with Elon Musk frequently tweeting about various coins and tokens, and KSI endorsing Bitcoin and how it’s the future, among many other celebrities. These people of power have given cryptocurrency its glamour and shiny outlook, with promises of earnings in the range of millions, crypto earnings giving you enough money to buy a big fancy house, and how supercars can be bought with a month of earnings.
On the flip side, cryptocurrencies have also been treated as the devil by other celebrities and the general media. Many cite events such as the Squid Game Token to generalise the crypto industry and give it its bad rep. High volatility and quick dips in prices have also been cited as common reasons as to why you shouldn’t invest in crypto tokens
Such conflicting statements given by relatively reputable people can leave you at a loss. Is crypto about big gains, or big losses? Is crypto safe or dangerous to invest in? Well, actually, both sides are in part correct! The degree of safety of a token largely varies from token to token, and some tokens carry higher risks either in that it’s more likely to be a scam, or the nature of their projects makes it harder to fulfil their objectives. Aside from the much higher risk of scams, crypto investing can actually be closely compared to stock market investing. Similar to beginner traders, beginners in cryptocurrency may find it dangerous to invest in certain tokens without a sufficiently strong foundation in trading and investing. Even then, there are steps that can be taken to ensure more safety when investing in crypto tokens.
Even eliminating the scam factor, crypto investing carries a large risk due to its unorthodox trading nature and other characteristics of certain tokens. Most tokens are met by a pump and dump upon initial coin offering, who seize the opportunity to quickly buy low and sell high. Most of the time, when a token stagnates in price for a period, their previous all time high was not long after either listing, or listing on a popular site such as CoinMarketCap. Tokens are also volatile as they tend to leverage on the performance of the native coin of the blockchain they’re using. So, for example, if one day the Binance coin starts dipping for no apparent reason, many tokens on the Binance Native Chain and Binance Smart Chain will also take a dive, even if those tokens aren’t necessarily performing poorly.
After reading this, you may now be left wondering how you can invest in crypto tokens safely. Check out our next blog post to learn how you can minimise the risks when investing in tokens!