Investors are being warned to “be on guard,” because the crypto market might be shaken from the spreading of the new Covid variant. Reports indicated that even big-name coins are facing the negative effects of the ongoing global pandemic.
Bitcoin seems to be the hardest hit of them all. The emergency of the Omicron variant has investors panicking, with the coin hitting a new low of $54,620, dropping 5% in a matter of hours, and plunging to 20% compared to the all-time high price of around $69,000 in November.
Ether (Ethereum), the world’s second-biggest after Bitcoin, also see a steep drop. According to data from CoinDesk, it declined to as low as $3,971 during the last 24 hours but has since rebounded 4.65% to $4,287.73.
However, within the bear market, one relatively obscure coin has risen strongly: Omicron, which has exactly the same name as the new variant.
Omicron crypto’s luck and impacts
Omicron, a tiny digital coin adding around 500% in a few days since the World Health Organization named the new Covid-19 variant. It has jumped from $60 to $420. Its 24-hour trading volume is at $391,930, with a fully diluted valuation of $333,217,990.
As of this writing, Omicron sits at over $333 as per data from CoinGecko. This value is still really high, especially when compared to its original price.
This sudden rise recalls the case of a scam Squid Game-inspired cryptocurrency last month.
Squid coin, inspired by the viral Squid Game TV, had seen its price soar by thousands of percent before crashing back to almost nothing. Following the cryptocurrency data on CoinMarketCap, its value has now plummeted by 99.99%.
In fact, even larger and more established coins regularly record sudden, double-digit percentage gains and losses while tiny cryptocurrencies rocket in value only to collapse a short time later.
Coins like Omicron or Squid is called “a decentralized treasury-backed currency protocol,” built on Ethereum scaling technology Arbitrum and launched just weeks or days ago, doesn’t have enough data to be given a market capitalization. These coins can only be traded on controversial exchanges like SushiSwap. Such transactions mean there isn’t a central authority in charge, are known to be often hit by hacks, exploits and so-called rug pulls that see users’ funds stolen.
Crypto investors named this kind of scam a “rug pull”. This happens when the promoter of a digital token draws in buyers, stops the trading activity, and makes off with the money raised from sales.
“Nowadays new coins can be listed on decentralized exchanges on the first day they are created, without any regulation or due diligence,” Jinnan Ouyang from Singapore-based crypto company Openmining explained for the spreading of low-quality cryptocurrencies.
With the rise in popularity of crypto and blockchain technology, there will be an influx of unprecedented cryptocurrency scams. Like it or not, crypto investors are opening themselves up to this new and evolving risk of fraud.
For now, only time will tell whether the Omicron crypto’s luck holds up. But if the new Covid variant wears on, then there might be a chance that the cryptocurrency bearing its name will keep surging in price.