I sort of see how this might be interesting, but all I'm getting is that it's a fake squid eye that drives people crazy with fear. The "unidentifiable amorphous alloy. Its consistency can not be altered by kinetic force or temperature." is kind of pointless. You don't need to have two classes of people in this, either.
I sort of like the idea of the mass suicide - this thing drives people crazy, but in the same way? That could lead to something. But your weird Penguin/Joker/Hannibal/other oddly eloquent madman schtick at the end seems to have very little to add here.
Overall, I've seen much better, but you could take some fragments out of here and recycle them if you feel like trying again with a similar idea.