SpaceX deservedly soared to all-time highs with a Starship rocket test flight this week and we all got excited but unfortunately it also became an illegal tool for cryptocurrency scams. Hype is creating surges in value with digital tokens allegedly linked to Elon Musk's recent space exploration company which has been preying on oft-unwitting investors.
But, these particular "SpaceX" tokens do not have any legitimate links to the company and are not given a nod by Elon Musk. They prey on people's interest in the earth-shattering feats of SpaceX, play upon the emotional ties that folks have to Musk and his pursuits.
Red Flags Abound
Price Spike Red Flags: The SpaceX test was conducted successfully and almost immediately, the price of two different "SpaceX" tokens experienced extreme uplifts which initially bled red flags. The largest Agario metaverse project on Solana was one of the hottest projects, skyrocketing 216%, along with another sidechain BNB Chain record high +5824%.
Liquidity Concern: Despite these monumental gains, both coins are plagued by extremely low liquidity. This implies that offloading these tokens without a substantial price dip are next to impossible, entangling whoever bought at highly inflated prices.
Absence from Major Exchanges: To make matters worse, as these coins are far too shady and the exchanges refuse to be associated with it hence they are not-listed on large volume reputable cryptocurrency exchanges like Binance. Making it more difficult for these customers to exit their positions, which exacerbates the supply constraint.
Exploiting Musk's Star Power: The huge following of Elon Musk and the companies he is involved with (Tesla, SpaceX) have made him a popular target for such scams. Wanting to cash in on the speculative mania, opportunistic developers launch "meme coins" or assets which are driven by hype and based purely on Musk's reputation and success of SpaceX to attract an investor base.
A Call for Caution
Evidently, no substantial engagement with these assets is recommendable. Warnings have been issued, suggesting that these coins might not offer any utility in the real world and may not have a legitimate or sustainable trajectory. Therefore, while the promise of significant gains in a short period is tempting, extreme caution is required if one is considering buying such a coin.
How to Protect Yourself?
Research: Look into any cryptocurrency project properly before investing in it, especially projects related to trending news or celebrities.
Seek Transparency: Legitimate projects will have high quality white papers, development teams and engaging communities.
Beware of Hype: Ohh no, do not let yourself be swept away. If it sounds too good to be true, then it is probably also not correct.
Get Professional Opinion: Talk to a financial advisor before making any investments.
SpaceX has some undeniable excitement to trade on its achievements, but at the same time we should never forget that scammers are lurking around their dens ready and willing to roll over you if you're not careful. Staying informed, exercising critical thought are ways investors can inoculate themselves from falling for these fraudulent ploys.