Why did Squid Game get so much attention?

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This week, the Squid Game (SQUID) project, which was created based on the Netflix series of the same name, gained great popularity among crypto investors. The developers of the project promised to launch an online tournament in November, which will consist of six rounds, similar to the games in the series.

It was assumed that SQUID tokens would need to be paid to participate in the tournament. And upon its completion, the funds will be distributed between the developers and the winner in proportions of 10% and 90%, respectively.

On October 29, the SQUID token went up in price by more than 3380%, despite the fact that a warning was written in the project’s white paper that tokens cannot be sold. After the Squid Game website and social media became unavailable, the value of SQUID tokens fell to $ 0.008 (a decrease of 99.9%). About 40 thousand users managed to acquire tokens.

Despite reports that the Squid Game project turned out to be fraudulent and the investigation of the Binance crypto exchange against its creators, the price of SQUID tokens began to rise again and as of November 5 is $ 0.05 (up 525% from the $ 0.008 low).

RBC-Crypto experts explained how not to get caught in similar projects in the future and why many crypto investors have invested in the Squid Game project.

There are several reasons

The SQUID token was obviously a fraudulent project, so the fact that a large number of people lost their money is surprising, says Nikita Soshnikov, director of the Alfacash cryptocurrency exchange service. According to him, there are several reasons why the project turned out to be popular among crypto investors:

  • “Hype” around the series “Squid Game”, which was used by the creators of the project;
  • Retail investors still perceive cryptocurrencies solely as a tool for generating money out of thin air. That is, they do not in any way delve into the technical characteristics of the coins, the scope of their application and the intrinsic value, thanks to which the rate is growing;
  • Influence of “meme” cryptocurrencies like Dogecoin and Shiba Inu, whose rates can go up and down in a matter of hours, bringing large profits to their holders.

It is likely that the growth of the SQUID token was not organic, Soshnikov admitted. In his opinion, the creators of the project could artificially inflate the cost of their tokens using the “Pump & Dump” scheme. Fake market participants manipulated the course, this was superimposed on the general excitement around the series and gave such a stunning effect, the expert explained.

“Investors saw an increase in the rate and ran to invest in a new coin, hoping for a quick profit. Situation from the series “Everyone ran – and I ran,” Soshnikov added.

The crypto market is built on reputation

Before investing in any cryptocurrency project, it is necessary to carefully study it and assess the prospects in the market, Soshnikov recommended. He emphasized that even projects whose founders did not want to deceive anyone, but planned to create a useful product, often do not survive on the crypto market.

“In the case of SQUID, investors did not check the project team at all. Who launched it, who created it? The project’s website does not work, social networks too, Netflix has disowned the project. The crypto market is based on reputation, and the team of SQUID creators did not have any reputation, ”the expert explained.

The story with the Squid Game project was initially dubious, says Valentina Drofa, Ph.D. in Economics and founder of Drofa Comms. According to her, information about the creators of the project was not available from the very beginning. The expert advised to be wary of projects that have become very popular on the crypto market in a few days.

“Such projects can receive a large amount of investment in the shortest possible time, close the project and leave investors without the investment they expected,” Drofa explained.

To protect your funds from investments in dubious projects, you should not make decisions based on emotions or because you like the dog or the series after which the project was named, the expert added.

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