‘Squid Game’ crypto and what to watch for when investing in digital coins
Global News
The crypto space is still rife with scams. But does that mean you shouldn't invest?
Bitcoin is trading around US$62,000 ($76,967) this week, a nearly 70 per cent increase from a year ago. At the same time, SQUID, a new crypto token named after the Netflix sensation Squid Game, saw its value crash to nearly zero — after skyrocketing by thousands of per cent — in an apparent scam.
If you’re wondering, as an investor, whether you should dabble in digital tokens, you’re likely to hear very different opinions from investment advisors. While some remain loath to put any of their clients’ money in crypto, others argue investors who can stomach the risk may want to consider devoting a small share of their portfolio to this new type of asset.
If you don’t know where to start, it helps to look at some of the risks that come with digital coins.
One thing to know about the crypto space: it continues to be rife with scams.
“Why is that? Well, anybody can issue a (digital) token,” says Andreas Park, a professor of finance at the University of Toronto and blockchain expert.
SQUID, which never had any official affiliation with Netflix, traded for a week before its creators abruptly announced they no longer intended to develop the token. Those who bought in collectively lost US$3.3 million ($4.1 million), according to an estimate by technology website Gizmodo.
Crypto experts have described SQUID as an example of a “rug pull” scam, in which developers draw in unsuspecting investors with the promise of creating a new token, only to quickly walk away with their funds, driving the cryptocurrency’s value to zero.
In the case of SQUID, part of the draw reportedly was the promise to create a play-to-earn platform inspired by the deadly tournament of the Squid Game show, in which adults play a deadly version of children’s games in the hopes of winning a big jackpot.