Engraved in our minds should be an episode that shows the craze that can happen in crypto during a bull market. The 26th of October 2021, the token SQUID started trading on PancakeSwap and in 7 days the price increased a whooping 75000%. But not all was sunshine and rainbows for investors (in fact, it was hell).
At the core of that craze laid the peak in popularity of the Netflix Show “Squid Game”, and the gullibility of some retail investors who had seen more than a few popular meme coins explode in price during that year.
The Netflix series named after a Korean children’s game told the story of the financial hardships of 456 people, who decided to enter a contest where they could earn around 30M$. What they didn’t know is that all but one of them would lose their life for it.
The scammers that created SQUID sold the token as a token for a play-to-earn platform, fully knowing that tokens rallied when realities in the non-crypto world with the same name gained popularity. Thus, the show would work as their marketing strategy, and they would be the ones profiting on the promise that “the more the people that join, the larger the reward pool will be” and that “developers will take 10% of the entry fee and the remaining 90% will be given to the winner”.
It also helped in their marketing efforts that major media like CNBC published articles that drove up the FOMO from crypto and non-crypto investors.
-About why did the price exploded and the Red Flags that were ignored-
The reason why the price kept increasing day after day was that the token could be bought, but I could not be sold. Thus, the scammers nullified the retail offer while the ever-rising SQUID token price charts and hype would bring in demand.
Many investors immediately raised concerns about the impossibility to sell the token in the only DEX that was trading it, PancakeSwap. The SQUID team responded to those issues stating that they deployed a “new anti-dumping functionality” that would prevent whales from dumping on new investors. That’s all that some retail traders needed to hear to justify grabbing their hard-earned BNB and exchanging it for SQUID.
But for those seeing clearly, the writing was on the wall. The SQUID “team” had beaten the Red Flag game and it was obvious that not being able to sell was just a strategy to drive prices up and then pull the rug.
-And so, it happened-
On the 1st of November 2021, at precisely 9:35 UTC, the scammers behind SQUID withdrew all the liquidity (aka pull the rug) for the SQUID/BNB pair on Pancakeswap, which made the token price plummet from 2851$ to fractions of a cent a few seconds later.
Price Chart of SQUID/BNB on Tradingview
You can watch the rug pull as it happened live on https://www.youtube.com/watch?v=CpR2kMxy7O8
-In conclusion-
Let this sad episode on the history of crypto markets be yet another cautionary tale to not be seduced by FOMO and the promise of massive returns, and that the press is not to be trusted since they tend to never do their research before publishing an article.
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