Floki Inu Has an Excited Community, and That Might Just Be Enough

For arguably most investors, the only thing you need to know about Floki Inu (CCC:FLOKI-USD) is that it (at time of writing) trades hands for a little over one-one-hundredth of a penny. You can play some cute psychological math tricks with this price. With a buck, you can acquire over 7,000 FLOKI tokens. The question is, do you really want to?

An image of a corgi wearing a horned viking helmet above text saying Floki Inu on a black background.

Source: Zie Project/ShutterStock.com

Obviously, that’s an inquiry only you can answer. But while the idea of acquiring thousands of digital assets for the price of a soda can might be appealing, everything is relative. Having visited countries with less-than-stellar economies, my U.S. dollar goes “far” on paper. But that just means you need to put more paper down for whatever you’re purchasing.

It can also be that your dollar does indeed go far in another country. But then, you’d be operating outside the stability and security of the U.S. Everything has its pros and cons, Floki Inu included.

Now, advocates of meme coins will be quick to point out that popular cryptos are backed by substantive decentralized business models. Admittedly, that’s one of the driving forces behind Floki Inu and similar speculative assets.

As our own Alex Sirois mentioned, FLOKI has “three flagship projects in the works. An NFT [non-fungible token] gaming metaverse called Valhalla, an NFT marketplace called FlokiPlaces, and a content platform called Floki Inuversity. By the way, Floki was a character in the hit TV show Vikings. That’s why you’ll find heavy reference to all things Viking related in the project.”

If you want to give Floki Inu a fair shake, the enterprise essentially represents the next evolution in gaming. No longer is mere connectivity enough: with FLOKI, you have an economic ecosystem undergirding its particular gaming universe.

A Combustible Mix for Floki Inu

While I acknowledge the allure of the metaverse — well, I don’t care about it personally, but millions of others do — and the multi-billion-dollar video game industry, it’s not the biggest reason to gamble on Floki Inu. The reality is that competition is fierce in the metaverse-related space and will only get more brutal and cutthroat.

As I’ve argued in the past regarding speculative “junk coins” like Shiba Inu (CCC:SHIB-USD), the power behind Floki Inu is the community. FLOKI ranks at number 2,794 in terms of market capitalization. However, it’s on over 232,000 watchlists per CoinMarketCap — and please note that these numbers can change by the time you read this.

On the other hand, we have nearby Nemesis DAO (CCC:NMS-USD). It ranks 2,817 in market cap but it only commands 5,154 watchlists. If we follow crypto market psychology to its logical conclusion, it’s not surprising that Floki Inu overtook Nemesis DAO and many other highly ranked but relatively unpopular projects.

And underlining all these junk coins is something called the small-cap effect. Basically, it’s the tendency of small-cap stocks to outperform their large-cap counterparts over time. You see this in play quite a bit for cryptos. For instance, Shiba Inu absolutely killed it in terms of year-to-date performance, starting from an impossibly small price to an extremely small price.

It’s a headache to read so many zeroes. However, the decimal point has moved quite alarmingly to the left, resulting in ridiculous profits.

Of course, merely having a low-priced asset is not a guarantee for success; it’s more likely a harbinger of failure. But mix the small-cap effect with a rising community of loyalists and you can easily see how Floki Inu dominated the percentage-based returns charts — and how it can do so again.

Will the Madness Ever End?

Like you, I’ve witnessed the meme stock phenomenon with awe and incredulity. It was hard to imagine that after a dedicated community of anti-establishment traders shot up the price of a previously irrelevant strip-mall retailer, that it could repeat its success. But it’s done just that.

From cineplex operators to cannabis firms to shipping companies to even private prisons, community is probably the main theme of 2021, not decentralization. Who knows when this party will end? That’s why Floki Inu has the potential to keep delivering.

But at some point, the music does stop on rampant speculation. It always has, and I dare say it always will. Recognizing the signs of the impending collapse, well, those are the folks that make the really big bucks.

As always, if you want to wager on FLOKI, that’s entirely up to you. But I’d only put in a very small amount of your risk capital at play.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

Article printed from InvestorPlace Media, https://investorplace.com/2021/12/small-cap-effect-community-fervor-boosts-floki-inu/.

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