YEREVAN (CoinChapter.com) — GROK, one of the recent entrants in the cryptocurrency world, is making massive gains. Inspired by Grok AI, the artificial intelligence service from Elon Musk’s social app X, the meme token has amassed a dangerously high market cap. Considering its low liquidity, however, this development can spell trouble for investors.
As a recent CoinDesk report indicated, GROK’s total market capitalization surpassed the 160 million mark today. Considering that the token launched a little over a week ago, this comes as a monumental achievement.
According to DexTools data, GROK has surged over 130% between Nov. 12’s closing price of $0.01141 and Nov. 13’s high of $0.02722.
It’s a weekly rally, meanwhile, amounts to over 15,000%. But why is the GROK price surging?
The recent jump in the market price of the GROK token can be attributed to a few key factors.
Association with Elon Musk:
As mentioned, the token gained significant attention due to its association with Elon Musk’s AI Chatbot, named Grok. This connection likely spurred interest among investors and traders.
It isn’t unusual for any perceived association with Musk to send cryptocurrencies soaring. Other meme tokens, such as Dogelon Mars (ELON). DogeFather (FATHER), and the STOPELON coin have surged multifold.
Even though the Tesla Chief has explicitly stated that he has no intentions to issue cryptocurrencies, investors are rallying behind his name.
The fact that GROK also got listed on crypto exchanges Bitget and MEXC has further enhanced its credibility among amateur investors.
FOMO (Fear of Missing Out):
In the cryptocurrency market, new tokens can sometimes create a FOMO effect, where investors rush to buy in anticipation of potential gains, further inflating the price.
Such is the case of the GROK coin. After showing its initial signs of surging, several investors have tried to jump on the bandwagon.
Stories about meme tokens turning early entrants into a millionaire (remember the Shiba Inu (SHIB) rally?) are turning people into FOMO investors.
Media Coverage and Social Media Buzz:
Widespread media coverage, articles, and YouTube videos have made GROK the talk of the town.
The endless discussions on social media platforms, such as X, have created a buzz about the GROK token. Hence, it is not surprising that its market cap is rising.
But wait! Where is the liquidity?
While the price and market cap of GROK are surging, there is a red flag that some investors have noticed. The available liquidity is not enough.
With over 11,000 holders at the time of writing, GROK’s total liquidity is no more than $1.86 million.
This wide gap has already sent speculations that the project will end up in a rug-pull. Since this particular token is one of the many GROK coins that were floated, its future remains uncertain.
According to the above data, the top 4 wallets hold more tokens than the total liquidity. Should they decide to dump their holdings, a massive run to the bank will ensue.
Those buying due to FOMO will be left with nothing but a bunch of useless tokens.
Investors would do great if they remembered that GROK AI has not issued any crypto tokens. Every time something happens in the tech world, a few meme coins appear in the market with a similar name.
It is quite likely that this token will be gone in a few weeks. Even if it sticks around, it has no underlying value yet. So buying GROK among the sea of cryptos may not be a smart choice.
