In 2023, there are over 22K cryptocurrencies on the market. And surely, they can’t all be on the level of Bitcoin. We recently went over Meme Coins, but do we truly understand ‘Shitcoins’? Let’s dive in.
They are otherwise known as the underachieving castaway child in the family. Basically, the derogatory and demeaning term Shitcoin was coined to describe failed altcoins or cryptocurrencies developed after the initial Bitcoin boom and popularity.
Moreover, as the name suggests, Shitcoins are referred to as such by the Web3 community because no one appreciates or likes them 99% of the time.
A loathed example of a Shitcoin is SQUID which rode on the success of the viral Netflix series ‘Squid Game’ back in October 2021.
Basically, people invested their hard-earned money in it, and the creators ended up rug-pulling the whole project. They sold all the shares and disappeared with $3.4 million.
A doomed end indeed.
Why are they frowned upon?
Well, Shitcoins are believed to be worthless.
They are cryptocurrency tokens that trend and rank regardless of not having a clear utility of benefit under the pretense of “huge potential growth” regardless of their utility.
Not just that, scammers and frauds can use them to exploit the less experienced underdogs out there. Let me explain.
Most of those who invest in Shitcoins are counting on a short-term price increase followed by an expected severe dip. And the goal is to capitalize on short-term gains.
Basically, a pump-and-dump scenario.
So, anytime you over-estimate a newly released coin and believe that it’s gonna moon… And then it ends up flopping and costing you a fortune, that, my friend, is a shitcoin.
me every time i buy a shitcoin pic.twitter.com/BU1BbbNGjA
— Ashley (@AshleyDCan) May 12, 2023
How do they work?
Developers typically announce the number of tokens that is ultimately available. In detail, they allocate a supply limit that creates scarcity. Meaning that additional tokens will not be created after a certain point.
Basically, there’s no practical use for Shitcoins up until now, since buying and selling goods IRL using them isn’t very common. In other words, the value of a Shitcoin is based on pure speculation. And how comforting is that?
Bottomline: A shitcoin is something people say is valuable simply because it exists…
Some Popular Shitcoins
However, not every coin that the community shits on with the slang term ‘Shitcoin’ is doomed. There might be some hope for redemption…
And some actually succeed in creating their own fanbase and market capitalization. These include the following:
- Spongebob: New Meme Shitcoin that is trending on CoinMarketCap.
- ApeCoin: This Shitcoin was launched by the Bored Ape Yacht Club Team (BAYC).
- PEPE (Pepe Coin): Currently popular Meme coin.
- Dogecoin: Popular ‘Dog’ Token with over an $11 Billion Market Cap.
- Shiba Inu: Trending Meme Coin with Strong Brand Presence
- Floki Inu: Shitcoin that is Trading Nearly 500% Up in 2023
Remember that most of the people in the cryptocurrency realm are neither professionals nor financial advisors; most are just sheep with a herd mentality.
So, in order to differentiate yourself from the lot, you have to do your due diligence and extensive market analysis.
RED FLAGS To Spot DOOMED Shitcoins
- The developers are doxxed/mysterious and little information is found regarding their identity. (Satoshi Nakamoto the creator of Bitcoin doesn’t count…)
- The roadmap of the project seems unoriginal or too generic.
- Closed-off social media groups where only admins can do the talking.
- Any new coin worth investing in should have a MINIMUM of 300 holders as per Experts.
- Unrealistic Return on Investment (ROI) expectations (Don’t fall for Money doubling scams)
- If the project you’re investing in doesn’t have at least $30,000 in its liquidity pool, it’s likely a shitcoin.
Can we make money from Shitcoins?
Yes, you can make money from Shitcoins. And a lot of people, mostly NFT Whales, did make a fortune buying and selling these cryptocurrencies.
Look, if you’re into flight-high-risk investments that aren’t long-term, you can surely make some money out of Shitcoins. Unless you’re a HODLer then you’re playing with fire…
Personally, I’d side with my guy right here…
I created a simple cheat sheet for playing the shitcoin season. Enjoy!
1. Are you the person who created the shitcoin? If yes congrats, you make money. If not, please see 2.
2. Are you a bot? If yes, congrats, you make money. If not, please see 3.
— Voshy (@voshy) May 9, 2023
A scarce few mere mortals (Not NFT Whales) were able to actually make money on the Shitcoin route.
And unfortunately, most people end up losing more than they initially bargained for. Check out the funny video an investor made after his ill-fated Shitcoin endeavors!
All in all, I can’t wait for the shitcoin season to be over.
It’s incredibly infuriating to watch countless Web3 influencers promoting these garbage coins to their followers online.
I mean, if chasing Shitcoins to make quick and easy money is your thing, be my guest. But don’t ever sell a business pitch to your followers when you aren’t even gonna buy the top in.
That’s just BS.
As always, stay tuned for more.