February 28, 2024

Crypto investors try to profit off of Queen Elizabeth’s death

Cryptocurrency creators are on the lookout for viral moments to make a quick buck.

They found it when Will Smith slapped Chris Rock at the Oscars, creating a Will Smith digital currency. And again, when the Netflix show “Squid Game” gained global fame, minting the Squid Game coin.

Now it’s Queen Elizabeth II’s turn.

In the days following the queen’s passing, more than 40 types of meme coins were minted, industry data and media reports show. These virtual forms of currency are often created by anonymous people with access to coin-creating websites — and an idea for a clever name. And they are notorious for wild swings in value.

That includes Queen Elizabeth Inu coin, which broadly honors her death and is built and available on various cryptocurrency platforms. The coin is currently priced around $0.000003, after a nearly 30,000 percent surge and drop from where it started. There’s also Long Live the Queen, a coin that lost steam within hours of minting.

Experts said most of these coins are typically a joke or a scam rather than legitimate forms of payment — or even akin to gambling in the new decentralized world of the internet, known as web3.

“It’s no different from people selling T-shirts outside of Buckingham Palace,” said David Hsiao, the chief executive of the crypto magazine Block Journal. “This is just the web3 version.”

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By most accounts, meme coins came into existence around 2013, as an image of a talking Shiba Inu puppy called Doge was gaining viral fame. A pair of software engineers released a themed digital currency called dogecoin, intending to satirize the cryptocurrency market.

But in 2021, as crypto gained mainstream acceptance, the sector began booming. Notable personalities, such as Tesla and SpaceX CEO Elon Musk, touted meme currency, such as dogecoin, online.

Some currencies, like dogecoin and Shiba Inu, have endured and are accepted by Tesla and GameStop as payment. Most, like Space Kim — a token satirizing North Korean leader Kim Jong Un — are jokes, and a risky investment without any tangible purpose.

Even bitcoin, a cryptocurrency that has been around for more than a decade and is considered more mainstream, is prone to steep swings in value. And the sector is largely unregulated, leaving it wide open to scams.

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Meme currencies are often limited in value, with many going for less than a fraction of a penny. Their value has limited financial underpinnings and is often based on the belief that “other people will buy it from you for more than you paid for it,” said crypto critic and web3 blogger Molly White.

“If it goes viral, that’s the best-case scenario because … people see that it’s going massively up in price and so they want to buy it,” she said. “It makes sense that people are basically just waiting for any topic that they think has any chance of going viral so that they can capitalize on it.”

For coins like Queen Elizabeth Inu, the price swings can be sharp and quick. The coin started trading a few hours before her death was announced, as Buckingham Palace announced she was sick. Shortly after her passing, the value of one coin was roughly $0. 000185, according to crypto data site Dexscreener. As of Friday afternoon, the coin had fallen even closer to zero value.

But on the encrypted messaging app Telegram, where investors talk about the coin’s performance, some remain bullish. “$50k is EASY with this coin! I do believe when the funeral comes this coin will get $500k,” one person said. Another person was more direct: “Funeral day incoming. FILL THOSE BAGS,” they said.

In recent days, the tone of the channel, which has nearly 900 members, has shifted.

“The queen and this token are dead,” one user wrote. “Let them Rest in Peace.” Others encourage patience as the coin’s price drops in value: “Guys! Trust the process!”

Moderators for the Telegram channel did not return a request for comment.

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“People who hold these tokens are trying to get other people to hold these tokens [and] believe that the token will go up for some reason,” White said. “That’s in [their] best interest.”

Crypto entrepreneurs have also created a slew of queen-themed non-fungible tokens, or NFTs, including God Save the Queen, a commemorative token that depicts colorful cartoon drawings of the monarch holding a bitcoin-logo staff. NFTs are digital tokens that function essentially as internet land deeds letting owners lay claim to digital art, music and photographs, and have similarly experienced wild fluctuations in value.

Ethan McMahon, an economist for the crypto research firm Chainalysis, said interest in web3 products relating to the queen have garnered less interest than he expected. For example, the NFT called RIP The Queen, which came out shortly after her death, had 1,817 people purchase it the first day, Chainalysis data showed. As of Thursday morning, it fell to one. This comes as transactions on leading NFT marketplaces hit historic lows.

Coins and NFTs related to the queen don’t seem to have a specific purpose to them, beyond novelty, McMahon said. More importantly, there’s less confidence in the broader cryptocurrency market than a year ago, when coin prices were sky-high and the extra income from pandemic stimulus funds gave people more disposable income to spend on similar investments.

“People probably just don’t have the highest conviction in crypto right now, and maybe don’t have the most expendable dollars or capital,” he said. “So things like this aren’t going to get the same amount of continued hype as they may have about a year ago.”

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Despite that, crypto critics, analysts and experts agree the government needs to step in and regulate, especially given scams that have happened recently. In November, creators of the Squid Game memecoin let it rise in value over 11 days to $2,860 and then left the project, driving its price down to nearly zero and walking away with $3.3 million in investors’ funds.

White, who writes the blog Web3 Is Going Just Great, said viral cryptocurrencies have significant consumer protection flaws.

“With these meme tokens and things like that, there’s no level of disclosure or transparency around who’s behind it, what their goals are, or who they even are,” she said. “If [creators] were to run off with a token, there’s no way of figuring out who they were, or tracking them down and pursuing legal action.”

Hsiao, of the Block Journal, agreed, but noted the money that bad faith actors swindle off people often isn’t enough to generate attention from government regulators.

“It’s definitely a sweet spot for cash grabbers,” he said.