Baby Shark Token’s Dramatic Downturn: What Went Wrong?

A memecoin dubbed the "Baby Shark" token, which recently gained traction as a representation of the most viewed video on YouTube, has seen a startling decline of 90% in its value. This slump occurred following revelations from the issuing platform about a lack of authorization for the token’s creation.

The Token’s Rise and Fall

The Baby Shark token, launched on Story Protocol—a blockchain specifically focused on intellectual property—reached a peak price of 35 cents, giving it a market capitalization of approximately $200 million. However, the situation took a sharp downturn, with the token’s value plummeting to under 0.064 cents after Pinkfong Co., the owner of the Baby Shark brand, released a public statement on X (formerly Twitter) clarifying that the token had "no affiliation whatsoever" with their company.

Baby Shark

The Musical Phenomenon

Launched in 2016, "Baby Shark" is a two-minute children’s music video that has amassed over 16 billion views on YouTube, making it a global sensation. The viral nature of the song fueled speculation and excitement surrounding its associated token, leading many traders to believe it was officially endorsed by Pinkfong.

The Misstep of IP.World

The issuing platform, IP.World, which issued the Baby Shark token based on a license from a Pinkfong licensee, later stated that their verification process had been flawed. They admitted that their reliance on incorrect rights led to the inability to release creator fees, causing a major fallout.

“We, and the community, had every reason to believe the launch was fully authorized,” IP.World spokesperson stated.

Official Clarifications and Impact on Traders

In an official post, Pinkfong emphasized that they had only endorsed two assets: a Baby Shark Meme on Solana and the Baby Shark Universe Token on the BNB Chain. This announcement did little to reassure the traders who had invested under the assumption that the token was legitimate. The hype was further inflated by influencer endorsements and promotional activities from Story Protocol.

A Surge in Speculative Trading

Amid the initial excitement, reports from blockchain analytics firm Bubblemaps revealed that a single entity, using multiple new wallets, managed to acquire $10 million worth of the Baby Shark tokens within the first minute of trading. This represented around 7% of the total supply at the token’s launch on September 23rd.

While the exact details surrounding the licensee involved in this controversy remain murky, CoinDesk has opted not to disclose the name due to an inability to contact the firm for comments.

Conclusion: Lessons Learned

The rise and fall of the Baby Shark token is a cautionary tale about the volatility of meme-based cryptocurrencies and the importance of verifying affiliations before investment. As the cryptocurrency landscape evolves, stakeholders must emphasize due diligence and awareness regarding intellectual property rights to mitigate similar issues in the future.