They say that it takes money to make money. With the rise in popularity of cryptocurrencies, many investors wonder how Dogecoin (CCC:DOGE-USD) and Shiba Inu (CCC:SHIB-USD) could make such staggering gains without having much functionality. Investors have been cashing in on the recent increase of meme token prices because they expect other people to buy at higher rates. Usually, investors rely on these platforms to add new value through innovative technology. Consequently, they are rewarded with higher prices. With that in mind, Floki Inu (CCC:FLOKI-USD) has the potential to change how people think about doggie-themed coins. Unlike SHIB and DOGE, this one will have some innovative uses.
The Floki Inu token is an ERC-20 designed for transactions on the Ethereum (CCC:ETH-USD) network. At this time, it can only be used as simple price speculation and not much more than that. The Floki team has planned for Valhalla, an entire non fungible token (NFT) -based game run by the token. This new gaming platform will allow users to interact with in-game items and characters from various video games. Considering the success of games like Decentraland and Axie Infinity, Valhalla could become the next big thing for the token. Floki Inu is also on a marketing blitz, which will help FLOKI prices rise exponentially moving forward.
However, investing in Floki is fraught with risk. But it’s also likely to pay off with a large return. If it can get anywhere close to popularity like Dogecoin and Shiba Inu did for their respective cryptocurrencies, then I think people will start taking notice. Be aware that you will lose 8% of your investment for every transaction, so be sure to take profits when the price is high.
Floki Inu Is Getting its Metaverse
In only a few months, Floki Inu will launch its metaverse. The development is sparking renewed interest in the altcoin. In this virtual world, you’ll be able to play games and win unique NFTs which can then be traded on the blockchain. These are the digital equivalent of collectibles you might find in your favorite video game. The NFT space has taken the investment world by storm in recent months. The metaverse is an immersive virtual world where people can live, work, and play using avatars. Some individual worlds are already gaining popularity, such as Axie Infinity, which rewards players with crypto assets for their time spent in-game. Other environments like Decentraland are immersive virtual worlds where you can own real estate.
Many mega-billionaires believe that the metaverse, a place where people can live without physical constraints, will become an immense opportunity. Cryptocurrencies that deal with virtual reality have seen an eye-popping 37,000% gain this year. Considering these gains, it makes sense why Floki Inu holders are excited.
However, my colleague Thomas Niel makes an excellent point. According to Niel, the three metacoins in circulation right now are well-established, but Floki Inu’s developers are scrambling to take on this new trend. The developers are late to the party. With the first mover advantage lost, it will be an uphill battle for Floki Inu to carve out market share in this segment.
Beyond the Metaverse
There are a couple more catalysts to keep in mind when investing in Floki Inu. Popular decentralized finance functions, such as lending and borrowing, have been brought to the Floki Inu community in an exciting development. It is part of the broader trend for meme-coins to transition into tokens with real utility.
Meanwhile, the Floki Inu project aims to reach a wide audience through its ongoing marketing campaign. The campaign has reached 15 countries, with Dubai and India being the most prominent. However, it has generated some controversy. Instead of attracting positive attention, it only seems to have generated regulatory heat and an inquiry from the U.K.’s Advertising Standards Authority. The U.K. advertising watchdog is taking an issue with the London bus and underground ad campaign the token is running.
The most important catalyst for meme coins is likely Elon Musk, Chief Executive Officer of Tesla (NASDAQ:TSLA). When he announced he was adopting a Shiba Inu puppy and naming it Floki, within 24 hours, there was already an entirely new crypto coin named after him. Nevertheless, this is not a viable trading strategy. It is hard to predict when Musk will push the coin up again with another tweet.
The public’s interest in this token seems to be waning. With no major news over the last few weeks, it is difficult for investors or enthusiasts alike not to want anything more than short-term gains.
Too Risky at the Moment
Floki is a risky investment, but it could either be the best or worst of your life. If its success is anywhere close to Dogecoin and Shiba Inu coins, you will likely make large returns on this investment. However, Floki also has risks that might lead people away from investing in them if things go wrong, such as a broader crypto sell-off.
The transaction tax is also definitely something to keep in mind. They could cut your profits if you’re not careful. The company takes 8% off every transaction with its controversial transaction tax. Half of it goes into holders’ pockets, including the burn wallet, in proportion to how many tokens you have. Due to the burning of coins, the price will rise in line with the nature of demand and supply. The 8% tax on all transactions will help or hurt Floki users depending upon how it is spent. The project can benefit them greatly if the funds are used wisely. But they may also lose out too much with the proposed percentage of their earnings taken away from them by this new market-oriented strategy.
On the publication date, Faizan Farooque 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.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. You can check out his analysis on InvestorPlace and TipRanks.