Floki Inu (CCC:FLOKI-INU) has underperformed as a cryptocurrency in the past several months. This is calling a spade a spade. After spiking to a peak price of $0.00033 (that’s 3.3 hundredths of a penny) on Nov. 4, the price has done nothing but drop. As of the end of the year, it was down to about $0.0001 per token.
That represents a 70% drop in the space of fewer than two months. Everybody, including me, who has bought this loser crypto has gotten creamed. A reasonable person might conclude that Floki Inu is a failure.
But is this really the case?
Where Things Stand With Floki Inu
On the one hand, the price of this meme crypto, which has a $2 billion market capitalization, is down a lot. On the other hand, the cryptocurrency is actually making good forward progress.
For example, you can now stake your Floki tokens and borrow against them. This is as a result of a new DeFi (decentralized finance) protocol sponsored by Inverse Finance (CCC:INV-USD). The developers of Floki Inu explained this process on Dec. 21.
The Inverse Finance platform allows you to use your Floki Inu as collateral to borrow other cryptocurrencies, including Bitcoin (CCC:BTC-USD) and Ethereum (CCC:ETH-USD). This provides liquidity to owners of large swaths of Floki Inu.
Say you own 10 million FLOKI tokens. At a hundredth of a cent, that costs only $1,000. Assuming you wanted to borrow $250 against this you could use a portion of this FLOKI. There is a 50% collateral factor for the 10 million FLOKI, and there may be other ratios and rules at Inverse Finance.
That way you can provide some liquidity without actually having to sell any of your position. You sell the Bitcoin or Ethereum but do not have to pay any capital gains tax on the amount borrowed.
Keep in mind this is not financial advice and might not be relevant to your particular financial situation. But it is now an additional way for investors in Floki to gain more liquidity. That is a good thing for the cryptocurrency that will help it gain value over time as it improves the liquidity of the tokens.
Big Partnerships for Floki Inu
Recently Shopping.io signed a deal that allows owners of Floki Inu tokens to use them to buy items on Amazon (NASDAQ:AMZN), eBay (NASDAQ:EBAY), Walmart (NYSE:WMT), Home Depot (NYSE:HD) and Etsy (NASDAQ:ETSY). The deal was announced on Medium on Nov. 3.
Floki has been spending a good of money on market deals, including sponsoring S.S.C. Napoli, an Italian soccer team. A Spanish team will feature Floki Inu depictions on its shirt sleeves.
As that article points out, FLOKI isn’t listed on any major exchanges. That’s noteworthy for two reasons. First, the fact that Floki Inu is able to get these teams and websites to take it seriously is quite an accomplishment.
Second, this is actually a potential catalyst for Floki Inu. The truth is it’s probably just a matter of time before some major crypto exchange puts it on its list. Once that happens, especially if it becomes much easier to buy Floki, the price will skyrocket.
I wrote an article last month showing how difficult it is now to buy Floki. The title says it all: “Buying Floki Inu Was So Hard That I Had to Do It Again.”
The point is now might be a good time to buy Floki Inu. The possibility of it eventually being listed on a major exchange acts as a potential catalyst for the cryptocurrency. But it truly may take some time, potentially a long time.
As a result, while FLOKI is cheap, it might worthwhile accumulating. Just make sure to not use any funds that you can’t afford to lose. This is a very speculative cryptocurrency.
On the date of publication, Mark Hake directly held a long position in Floki Inu but not in any other of the securities mentioned in this article, either directly or indirectly. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Mark Hake writes about personal finance at mrhake.medium.com and Newsbreak.com and runs the Total Yield Value Guide, which you can review here.
