Over the weekend, a DeFi token with the same name as the new ‘Omicron’ Covid-19 variant surged 1,100%. OMIC hit an all-time high on Monday of $689, according to CoinGecko, but loses about 75% value overnight.
The buzz over the latest Covid-19 variant, Omicron, is not over, but the euphoria over the token named after it came and went in an instant. Omicron Coin (OMIC), a lesser-known cryptocurrency, was on a roller-coaster ride for three days. The digital token has surged 11-fold before giving up three-fourth of its value.
The Omicron token, which trades as OMIC, launched at the beginning of November, according to CoinMarketCap. It started to rally over the weekend, shooting up as much as 1,100% from $64.84 on November 27 to $711.09 on November 29, before trading at $210.28 on the last day of the month. In that period, OMIC, worth about $781,000, has exchanged hands, data from Crypto.com suggested. However, in just one day, the token has eroded more than half its value, the data said.
The maximum supply of Omicron token is 1 million coins. It can be traded on only one platform, Sushiswap, a decentralized exchange. Its market cap is not available.
Such euphoric rise in tokens is often followed by a fall after the initial buzz subsides. Such wild swings draw a lot of criticism across the globe.
“It might be another rug pull,” said Sharat Chandra, a Blockchain & Emerging Tech Evangelist. “Investors should be wary of such tokens till there is enough credible data to back the price trends of these tokens that are unheard of.”
For example, Squid Game token, named after the Netflix series Squid Games, also saw a bizarre rally that eroded investor wealth.
“It suddenly gained attention after the WHO named the new Covid strain Omicron in a bizarre coincidence,” said Ishan Arora, Partner at Tykhe Block Ventures. “The price of the token shot up without any actual reason. It is similar to how Elon Musk mentioning Doge or Shiba Inu caused a short-term effect in the tokens.”
Analysts point out that the trading in Omicron was purely based on speculations and compared it with trading in Dogecoin.
Global marketing head of Kristal.AI Siddhant Raizada said, “This is like Dogecoin, which is driven by speculation but did not have any use case. Omicron crypto is not backed by any project; hence there is no utility to justify the usage of this token. There is no rationale as to why its prices should go up or be of any value. It’s completely arbitrary and speculative”.
In one year, Dogecoin had rallied over 6,000%. However, its price had remained flat in the five years until April this year, when the rally began.