(Yicai) June 12 -- A new cryptocurrency called Labubu Coin has been quietly launched on a number of exchanges, in an attempt to ride the wave of popularity surrounding the trendy Chinese toy brand Labubu. However, the token’s price has fluctuated wildly, losing 87 percent of its value at one point, and industry insiders warn that the allure is rapidly fading.

It is not unusual in the crypto world for coins to be launched by piggybacking on hot events or popular culture. Industry insiders warn that the Labubu Coin is a classic case of crypto speculation. Projects like this tend to be worthless, fraudulent and similar to pyramid schemes.

Labubu Coin started trading at USD0.04429 on its first day, then surged as much as 98.37 percent, before crashing just as fast and plunging to as low as 34.18 percent from the opening price, according to data from crypto tracking site CoinMarketCap.

Over the next 16 trading days, Labubu Coin’s price continued to seesaw dramatically. Investors who bought at the peak on May 30 would have faced a loss of 87 percent by June 4.

Labubu Coin is not issued by Pop Mart, the toy's copyright owner, but by a group of community-driven developers, according to its promotional webpage.

Labubu Coin is simply taking advantage of the market hype, said Yu Jianing, co-chair of the Blockchain Committee of the China Communications Industry Association. It is leveraging the Labubu character’s high popularity and strong influence in the designer toy circle to attract attention and funds. However, the sharp price drop after the initial surge is a classic pattern of buying then dumping.

"This is clearly a marketing stunt," a crypto industry insider said. Interest in the project has dropped significantly in just two weeks, he said, adding that such coins are largely viewed negatively in the industry. Labubu Coin’s market value had plunged 18 percent from its peak to USD45 million as of 8 p.m. yesterday.

Issuing tokens by riding on the back of viral trends or pop culture is common in the crypto world and these are often referred to as ‘meme coins.’ Their value depends entirely on generating attention among the public. For example, in January both Donald and Melania Trump released their own tokens, namely the Trump Coin and the Melania Coin.

Editor: Kim Taylor