'Squid Game' coin smells fishy

Investors drawn to cryptocurrencies can be forgiven for having an expectation of high returns. After all, Bitcoin rocketed about 350% over the past year. "Memecoins" such as Dogecoin and Shiba Inu have also surged, often for no particular reason.

Big gains aren’t a given, though, especially in a market as untamed, sprawling and speculative as crypto. For evidence, there’s Squid Game, the latest memecoin sensation, inspired by the Netflix hit. It surged more than 23 million percent in the week ended Oct. 29 to $2,861.80. But on Monday, it plunged 99.9% to less than half a cent. Neither Netflix nor the Squid Game show’s creators have anything to do with the coin.

"Betting on the right coin can lead to jaw-dropping riches," said Antoni Trenchev, co-founder of crypto lender Nexo. "The problem is, what goes up in a straight line tends to retreat in a similar fashion."

The Squid Game coin’s boom and bust reveals another side of the crypto frenzy: The potential for demand to suddenly dry up, or worse, for developers to abscond with the funds in a scam known as a "rug pull." This appears to be what happened with the Squid Game coin, as the official website went offline after the coin’s stunning plunge. Gizmodo reported the creators of the cryptocurrency cashed out with an estimated $3.3 million.

Investment history is strewn with examples of booms and busts and scams. Individuals who are piling in now risk learning a hard lesson somewhere down the line. Squid Game investors already did.

— BLOOMBERG NEWS