All about shitcoins

The term " shitcoins » is an umbrella covering all the fallout from failing or already failing cryptocurrencies. Usually devoid of any identifiable objective, shitcoins have no no basis of existence and lack the fundamentals to support them. As their purpose is undefined, unlike Ether and Bitcoin, these coins have no longevity associated with them.

Have you ever encountered this term in social media conversations or crypto-related forums? Well, now you will know what the term means. But before you start, you will need to know that shitcoins can be purchased through decentralized platforms like Pancakeswap, Uniswap, etc.

Let's go

🥀 What is a shitcoin?

Un shitcoin is a cryptocurrency that, in one's subjective opinion, is a poor investment choice. The term is also used to describe parts that do not serve a particular purpose.

The term shitcoin refers to a cryptocurrency with little or no value or a digital currency that has no immediate, discernible purpose. The word is a derogatory term often used to describe altcoins or cryptocurrencies that were developed after bitcoins became popular.

The diminished value of a shitcoin is often due to the failure of investor interest because it was not created in good faith or because its price was based on speculation. As such, these currencies are considered bad investments.

🥀 What gives value to shitcoins?

Shitcoins derive their value purely from existence. At launch, speculation around their creation results in an influx of investors who inject money. Bulk buying drives the price of these coins up exponentially in a short period of time.

Once these investors cash in for short-term gains, their price drops as quickly as it rose. Once all the immediate gains have been made, the price of shitcoins stays at the same level without showing much movement. This pump-and-dump trend often leaves unsuspecting novice investors with a load of worthless shitcoins.

For example, Dogecoin derives its value from the tweets of the richest person on the planet, Elon Musk. Without his support and publicly shared opinions, the value of the coin would be based on nothing. Furthermore, the CEO of Tesla also announced that the company will accept payments in Dogecoin on a trial payment basis.

🥀 How to recognize shitcoins?

Shitcoins exhibit several significant red flags despite developers' attempts to cover them up. Here's what to look for:

Shady developers: Cryptocurrency developers, if visible to the public eye, sufficiently inspire the trust of the masses and add legitimacy to freshly launched crypto. Faceless developers are bound to be dubious and likely to scam people.

Undefined functionality: blockchains like Bitcoin and Ethereum were designed to improve decentralized finance (DeFi) by removing a central authority and improving transaction security. BTC and ETH are therefore stores of value because of the utility they provide. Shitcoins have no such underlying purpose and only exist because they can.

Generic projects: If the project makes big promises but does not have defined features, it is likely to be a shitcoin. These project websites are usually hosted on free domains, riddled with typos, and even casually designed.

Few holders: The standard suggests that a legitimate cryptocurrency must have at least 200 to 300 coin owners. Any number below the lower end of this range indicates sinister activity. A healthy coin to invest in should also show 5-10 transactions per minute.

Pool of dry cash: a newly launched decentralized exchange heavily on liquid funds. Less than $30 cash is a glaring red beacon that you should avoid. The piece can even be priced at surreal discounts to the tune of by 30%, which is not sustainable.

🥀 Where to buy shitcoins?

Shitcoins can be purchased on several cryptocurrency platforms. Of course, as mentioned above, shitcoins are always subjective. It is therefore impossible to give specific guidelines as to which platform you can use to obtain them (if that is your goal).

A rule of thumb is to look for platforms specifically designed for traders who like to swing cryptocurrency. Platforms like these include Binance, Bittrex and other legit exchanges. Be sure to transfer the coins out of your exchange wallet as soon as you get them.

🥀 What should you check before investing in crypto?

Existence of a white paper for the project: A white paper proves that the project is genuine. Without this, the cryptocurrency loses its validation. The quality of the white paper is equally important. An unprofessional structure, lack of consistency, and frequent typos are all reasons to question its legality.

Check the developer promise: as lay investors, most of us tend to ignore technical details, assuming they seem indecipherable. However, this is the only habit that scammers exploit and embellish the content. It may state that the project will achieve an end goal but not explain how.

🥀 Why would you want to buy shitcoins?

Small-cap altcoins can be the most “high-risk, high-return” investments you could potentially make. There is a very high chance that you will lose all your money. However, very occasionally, you may find yourself in one of two situations:

• The shitcoin you hold becomes the victim of a pump and dump system
• The shitcoin you hold is actually not a shitcoin and you become what is called a “early adopter”

Both of these cases can be very profitable if you have set clear goals for when you want to sell. On some occasions, a minimum investment could bring you the biggest returns. Just make sure you have clearly identified your goals and stay emotionally detached from the room.

Un good example part of this phenomenon is the impressive increase in value of XVG, a private coin that many people considered a shitcoin. In a short time (1-2 months), the cryptocurrency increased by almost 8000%, making a small number of believers very very rich.

Of course, since the coin had no proceeds and was overhyped, its price quickly fell back to its original value.

🥀 Best practices for buying shitcoins

Before you go ahead and buy cryptocurrencies that are relatively unknown or hated by the community, do thorough research to better understand its short-term and long-term potential. Then, once you are sure that the price of a particular coin might increase, start by investing a small amount of money.

Watch the market for a while and determine if your initial speculation is correct. Otherwise, you will be forced to make a difficult choice: either you sell your coins and take a small loss, or you keep them and wait for a possible appreciation in their price.

If the price starts to rise, it is better to take profits or at least your initial amount and continue following the uptrend. Conversely, and if you are fully aware of the risks, you could also invest a larger amount when a clear signal indicates a buying opportunity.

Finally, as mentioned above, don't forget to always control your emotions. Small cap coins are often seen as opportunities due to their low price. So many people create unrealistic expectations and end up losing a lot more than they invest.

And that's all ! We hope you found what you were looking for and look forward to your feedback. If you have anything to add, please let us know so that we regularly update the article as needed.

🥀 Advantages and disadvantages of shitcoins

Benefits

Shitcoins can offer spectacular returns in the very short term. Some investors manage to make significant profits by speculating on these extremely volatile assets. The low cost many shitcoins make it easy to acquire large quantities. Some investors are willing to take on high risks in the hope that they will end up being worth much more.

Media buzz around certain shitcoins at any given time may lead to a soaring prices. For some, this provides an opportunity to buy quickly in the hope of selling at a higher price.

Drawbacks

Most shitcoins eventually collapse and lose almost all of their value in the medium to long term. THE risk of loss is therefore extremely high.

Many shitcoins are scams aimed at enriching their creators before disappearing. Investors can lose all their funds within days or weeks. The market manipulation and extreme volatility of shitcoins make them unpredictable. Even short-term gains are uncertain and rely mostly on luck.

Le lack of transparency and the lack of strong fundamentals to support their value are major flaws for most shitcoins. Their course is based on speculation and emotion.

🥀 Closing

Although the term may make you smile, shitcoins are digital assets that should not be taken lightly. Behind certain tempting promises of easy and quick gains hide serious risks for the uninformed investor.

The extreme volatility, lack of transparency and lack of strong fundamentals make their value quite unpredictable and speculative. While rapid returns are possible in the short term for the lucky or savvy, a sudden drop in prices is the most likely outcome for the majority of shitcoins in the long term.

Before investing in these crypto-assets with sometimes ridiculous names, it is better to learn in depth about their mechanisms, know the teams who develop them and understand what problem they are really trying to solve. Otherwise, the uninformed investor runs the risk of losing a lot to the benefit of a few unscrupulous manipulators.

It is wise to diversify your investments in established and promising cryptocurrencies rather than betting everything on the very uncertain success of a trendy shitcoin. As with any new El Dorado, we must be wary of the illusions sold by dream sellers. Caution remains essential in this Wild West that is the cryptocurrency market.

But before you leave, learn how finance a project with cryptocurrencies.