Sh*tcoin: is it worth dealing with it?

On March 8, 2021, the Safemoon was launched and quickly began to gain popularity on social networks. The main Safemoon feature is a so-called 10% fee for selling tokens. Part of this fee is distributed back to current holders and the liquidity pool. Thus, the token was aimed at holding. Although the project has no benefit or purpose, there was hype around it, even some celebrities joined the buzz.

Table of Contents

Then in mid-April, the Safemoon’s price jumped thousands of percent, while trading volume increased over 100 times in a week. After that, the “token aimed at holding” started being sold rapidly, causing the price to crash by more than 50% in a few days. Safemoon has had several ups and downs, but it is now 80% below its all-time high.

A similar story happened with FEG Token in May 2021. Its trading volume and price also skyrocketed 100 times in a couple of days and then dropped quickly. FEG Token is currently 85% below its high. Another example is Baby Dogecoin, which dropped 92% of its ATH. All of these stories are classic variations of the pump and dump scheme, where the hype is formed to push its price up, and then the coins are dumped in a moment.

And this is something that you may come across quite often if you decide to contact shitcoins. But that’s not all. However, let’s first define the terms.

What is shitcoin?

Shitcoin is a coin or token that has no intrinsic value or use. Quite often, such coins imitate existing coins and try to gain recognition at their expense. Unlike Bitcoin or Ether, where developers are constantly trying to improve the network to fulfill its functions and goals, shitcoins have no valuable purpose and mostly there is no development. Therefore, they have a short life span. Do you remember the IUNGO or Copytrack crypto projects that can be seen in 2017? Most likely not, because they are already dead.

If a coin has a sufficiently small number of holders, for example, less than 200-300, then it can also be considered a shitcoin. This means that the coin is not healthy and can easily be exposed. In the case of a large number of holders, it is necessary to pay attention to the distribution of coins. If most of the coins are controlled by one or a few wallets, then this also creates opportunities for manipulation and increases the risks for investors.

Other characteristics of shitcoin are low trading volume, network activity, and market capitalization. Let’s take Dimecoin as an example. It was launched in 2013 and it is one of the oldest UTXO blockchains that still exist. But the coin’s trading volume has been only a few hundred dollars a day for many years now. The only memorable moment is the jump and rapid drop in early 2018. That is why the coin is currently trading 99% below its ATH.

And this is the fate of most shitcoins: either an unnecessary existence for almost anyone or a one-day wonder that everyone will quickly forget. It makes shitcoins not the best long-term investment, from which the following statement emerges.

FILM REVIEWS

Shitcoins can make you money but they are unlikely to make you rich

There are more than 12,000 cryptocurrencies, and the vast majority of them are shitcoins that the market doesn’t need. At the same time, more than 10 new coins and tokens appear every day, and most of them will presumably be ignored by investors. But this does not mean that all new coins are shitcoins. Bitcoin and Ethereum also started with a low adoption level. Many projects from top-50 by market capitalization are actively developing and were launched just a few years ago.

Since there is still a chance that a new coin will explode or some shitcoin will turn into a one-day wonder, people continue investing in them. But it is worth noticing that investments in shitcoins are accompanied by high risks, because the coin may never shoot, quickly fall in price, or cease to exist.

Some shitcoin investors like to compare this with venture investing. 80% of venture capital investments bring only losses, and another 10% break even. In turn, the last 10% are diamonds that give 100x returns and recoup all past failures. That 10% of startups keep VC investors looking for next investments. But there are still differences between a startup that is trying to solve some problem or bring something new and a memecoin that does not bring anything useful to the market.

One way or another, shitcoin investors predominantly buy them because they want to get rich quickly. They find on Reddit or Twitter information about such coins as SHIB, where you can buy millions of tokens for just a few dollars. And then they go to crypto exchanges, for example, CEX.IO, to buy and wait for the token price to be at least 1 cent. But given the SHIB supply, in this case its capitalization would be greater than the world GDP, which already looks extremely unlikely.

That is why if you are the one who invests in cryptocurrencies at random or succumbs to “get rich quick” stories, then you play the lottery. And as in any lottery, people more often pay attention to the stories of several winners than thousands who were left with nothing. This means that if you even decide to try your luck with shitcoins, invest only what you afford to lose.

Shitcoins have some generally recognized characteristics but their perception still remains quite subjective. For example, some investors believe that if a cryptocurrency is centralized, then it automatically becomes a shitcoin, even if it is quite popular, with a roadmap, and useful features. On the other hand, there are those who ignore all the generally accepted characteristics and continue to believe that their beloved coin is not a shitcoin and a great future awaits it. Due to such subjective perception, it becomes even more difficult for beginners to identify shitcoins, making them even more dangerous.

Latest Posts

Got a story? If you’ve got a celebrity story, video or pictures get in touch with the MarkMeets.com entertainment team by emailing us Tips@MarkMeets.com or by visiting our Submit page – we’d love to hear from you.

Follow MarkMeets across social media

Twitter @MarkMeets | Facebook @MarkMeetsPR | Instagram @MarkMeets | Youtube @MarkMeets |

“We’re Here To Inspire And Lead The Way In Entertainment”. – MarkMeets

Author Profile

Adam Regan

Deputy Editor

Features and account management. 3 years media experience. Previously covered features for online and print editions.

Email Adam@MarkMeets.com