The surge in cryptocurrencies has created some interesting stories about their origins. None more amusing than Floki Inu (CCC:FLOKI-USD), which got its name from Elon Musk’s Shiba Inu puppy named Floki.
You’ll get no argument from me that Floki’s an adorable dog. I wonder why the billionaire didn’t take home a bunch of rescues instead. He could afford to finance a nearby animal shelter to his new digs in Texas.
But, as a friend of mine likes to say, it’s his money, he can do with it what he wants.
Anyway, I’ve never written about FLOKI-USD, so I was trying to think about a theme for my first article. All I could think of was buying some of the cryptocurrency as a cheap treat for yourself. Here’s why.
Floki Inu: A Move to 3 Zeros
As I write this, FLOKI-USD is trading at $0.00006093. Were it to get to $0.0001111 by the end of December; you’d be looking at an 82% return. Admittedly, that’s not quite the 2,000%+ return it has earned since its relaunch in July, but it’s still pretty darn good.
And that’s only just getting over the three-zero threshold to $0.0001111. If it were to get to $0.0009999 by the end of the year, you’d be looking at more than 1,500% over the final two months of the year. That’s very tempting.
After all, for every $100 bet on FLOKI-USD, you’d get back $1,500 in 3 months for an annualized return of 9,000% [1,500% divided by 2 multiplied by 12].
Heck, that’s such an enticing bet; I might even have to crack my card and buy me some Floki Inu.
Seriously, though, my InvestorPlace colleague Josh Enomoto, who’s made some real coin on Bitcoin (CCC:BTC-USD), and thus is someone I lean on for guidance in this area, recently made a good point about the relative newcomer to cryptocurrencies.
“It must be said that cryptocurrencies in general, whether you’re talking Bitcoin, Floki Inu or any of the other 12,000 or so digital assets, are extremely speculative. So don’t get the idea that I’m endorsing FLOKI-USD, because I’m not,” Josh wrote on Oct. 19.
“At the same time, if you’re hellbent on investing in cryptos despite the myriad risks, then it makes sense to spread your risk across both established assets and more speculative coins. And frankly, I’m not entirely sure if it’s worth putting that much into BTC relative to where people believe it will go in the near term.”
As Josh argues, you can bet $61,000 in Bitcoin to make $39,000 by the end of 2021, or, assuming another five-fold return for Floki Inu by the end of the year, you would have to put up just one-eighth the amount of $7,800.
So, in some ways, the risk-to-reward for Floki Inu is much better than Bitcoin at the moment.
But like Josh, I’m not saying you should bet your child’s education fund on FLOKI-USD. I’m only saying that if you’re a “balls to the wall” kind of investor, the climate is suitable for a speculative bet on the cryptocurrency.
The Bottom Line: Consider Floki Inu’s Utility
When it comes to cryptocurrency, the only thing that matters to me is utility. If a crypto doesn’t have it, I’m not interested. It’s why I haven’t jumped on Bitcoin. It’s a modern version of gold. Only it’s not nearly as tangible an asset.
So, before considering Floki-Inu, I would consider its utility beyond being a cryptocurrency. What can it do to make the world a better place?
According to its Whitepaper, it’s got plenty:
“This all-star team never stops building the utility of Floki Inu,” its Whitepaper states. “In addition to the bridge, to bring utility to Floki Inu, Floki Inu is partnered with CryptoCart which gives FLOKI holders the ability to use the Floki Inu token to purchase items at over 1,700 stores through a partnership with CryptoCart (CC).”
Now, I don’t mean buying stuff I can already buy with fiat currencies. I mean real game-changers. So far in the cryptocurrency evolution, I’ve seen a lot of things that replace purchases with dollars with cryptocurrencies but not much else.
Floki Inu’s general vision talks a big game when it comes to utility, but in the end, B.S. walks, and money talks.
So, for this reason, I could not recommend buying Floki-USD. However, if risk is your middle name, fire away. All you’ve got to lose is money.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.