Floki Inu (CCC:FLOKI-USD) is a meme coin, just like Dogecoin (CCC:DOGE-USD) and Shibu Inu (CCC:SHIB-USD). It is named after Elon Musk’s Shiba Inu dog, Floki. But ever since it was established, FLOKI crypto has benefited from a huge amount of marketing spending by the backers of the crypto.
For example, Floki Inu now has a virtual crypto world, a university, and is developing a game based on an alternative reality. In addition, the crypto has recently started sponsoring Italian football (soccer) teams.
According to Coin Telegraph online magazine, the group behind Floki Inu signed a sponsorship deal with S.S.C. Napoli on Nov. 23. This team is considered one of the most popular professional teams in Italy.
The team issued a press release on Nov. 23 announcing that the Floki Inu dog picture with a Viking hat on top will be on the backs of the players’ shirts. Interestingly the release indicated that Floki’s goal with the sponsorship deal is to become “the most known cryptocurrency brand in the world.” Given that the S.S.C. Napoli team has a “fantastic fanbase” this sponsorship deal will help Floki reach this goal.
This is on top of Floki’s sponsorship deals with other football teams, including the Kerala Blasters from the Indian Super League, and the Spanish La Liga’s Cádiz. In addition, Tyson Fury, the British professional boxer and two-time world heavyweight champion, signed a sponsorship deal with Floki Inu’s backers.
So with all this sports and media spending, what is going on here?
Global Marketing Spending
Floki’s backers have been spending a large amount of money with this goal in mind. For example, they plan to run a TV marketing campaign during the first week of December through Christmas. This is after they ran a series of subway poster ads in London and Los Angeles.
Here is the statement that was Tweeted when Tyson Fury was signed:
“In what is a landmark deal indicative of $FLOKI‘s intent to corner every sphere of the world and be a dominant cryptocurrency, we’d like to announce a strategic partnership with the Gypsy King and Undefeated World Boxing Champion Tyson Fury!”
The key point is that Floki wants to be “a dominant cryptocurrency.” How can they afford to pay for all of this?
If you read through the Floki Inu White Paper, you will see there is one section called “Treasury Tax.” It works out to 3% of each transaction, other than transfers, done using Floki — i.e., purchases, sales, or spending on goods or services. The two networks that allow these transactions are the Ethereum (CCC:ETH-USD) blockchain and the Binance Smart Chain (CCC:BNB-USD).
Let’s take a look at this more closely. For example, Coinmarketcap indicates that during the last 24 hours, there have been $36.562 million in Floki transactions.
So assuming that roughly half of that amount involves dollars spent from Floki wallets, we can estimate that monthly there are roughly $420 million in Floki transactions. So, if we take 3% of that amount, it implies that $12.6 million in marketing money can be spent by Floki.
However, to be conservative and to eliminate the estimated dollar value of transfers, let’s narrow that down to $10 million monthly. That still works out to $120 million annually that Floki can spend on marketing. That is a large dollar value and should eventually have some effect on its popularity.
What to Do With FLOKI Crypto
Keep in mind that FLOKI crypto has a market capitalization of just $1.419 billion. That means that the backers are able to spend 10% of its market cap annually on marketing. This can even include purchases of the FLOKI crypto, in order to help move it higher or to prevent dips.
However, so far, at least in terms of the last month or so, this marketing spend has not worked. That is because FLOKI crypto is down significantly. After peaking at $0.0003379 per FLOKI crypto token on Nov. 4, it had fallen to $0.0001306 as of Nov. 28. That represents a 61% drop.
This shows that many people are taking their profits after the recent peak, despite all the marketing spend news. At some point it may make a difference. So far, however, there is no evidence that it will.
On the date of publication, Mark R. Hake held a long position in Floki Inu but did not own any other security mentioned in the article, directly or indirectly. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.