There is Bitcoin, there is altcoin and then there are ‘Shitcoins’ and here’s how to flag them.
‘Shitcoin’ refers to the useless cryptocurrencies that add no value to the crypto ecosystem but take away a huge chunk of investors money into their deficient projects. It further degrades the sanctity of the entire crypto markets by going either in the dead coins list or trading significantly below their market entry price. Investors have lost much of their crypto wealth after investing in these Shitcoins who failed to recognize the inherent properties of the trust crypto ecosystem puts forth.
How to recognize a Shitcoin?
Not all cryptocurrencies are labelled as Shitcoins as most of the coins out there in the markets are not even blockchain-based and are sold on the idea of “Getting Rich Quick” schemes only to dupe its investors. They are basically small-cap altcoins which are not backed by any fundamental concept and bring no value to its investors. These coins are available even on the prominent exchanges, and beginners have a hard time evaluating them. Investors think that the price will surge; instead, it tanks eventually.
If you have already invested in a coin other than a mainstream cryptocurrency, you will likely lose your investment because Shitcoins-
- -Enter the market behind the pump and dump scheme; make easy money and tank
- -Have a referral commission structure and mandate team building for more profits
- -Have nothing to do with innovation or add worthwhile benefits to the crypto community.
- -Go defunct in a short amount of time after eating up the investments
- -Despite these shortcomings in them, these Shitcoins can sometimes give an exceptional return to early investors due to their hyped nature and the ability to pump huge amounts of money.
Some examples of such coins are Verge(XVG) 702%, and PIVX(PIVX) 9000% that gave a sound return on investment to their investors smart enough to invest early, but not to them who bought close to the peak.
It gets increasingly tough to differentiate a worthy coin from a Shitcoin as it shares similar characteristics with most other coins in the market. Market caps, total supply, token type and other details are often misleading and pose a price risk full of volatility and uncertainty. Here are a few things to know before trading cryptocurrencies when entering the seamless crypto industry. You can always use our expertise and protect your capital from trading adversities and hurdles in the form of shitcoins. Gain enhanced investment intelligence so that you never have to waste your time and money on FOMO, and FUD.
How to Steer clear of these ‘Shitcoins’?
1. Conduct in-depth research:
Keep an eye on the coin of your choice. You can do it by monitoring their social channels and follow all their updates to try to make sense of their entire existence and learn about their next move. This will help you immensely as you will grow your knowledge in cryptocurrencies and won’t be scratching your head how to identify the best proposition. Tradedog’s research reports can be of great help here.
2. Read the coin’s whitepaper
The whitepaper is perhaps the most important part of a tokenized project as it contains various details such as token economy, its investors, developments, product details and much more. Reading the whitepaper alone can reveal if the project is worthy to invest in or it is just another coin heading to its demise soon enough. Drop a message to us if you wish to understand the white paper of any coin and we will summarize it for you.
3. Participate in discussions
Join crypto-discussion channels as they are a great way to flag fake projects, shitcoins and shady investment projects. You can use the help of Reddit, Quora, bitcointalk, and telegram to get advanced insights on different crypto projects. These are a huge community of enthusiasts who actually know what they are talking about and debate across a wide area of cryptocurrency ranging from token, blockchain, cryptography, Dapps, exchanges, security and much more.
You can visit and follow these discussion and social channels below:
4. Dig deeper
-Try to gain as much information you can possibly recover from the depths of the search engine. Such coins lack basic information about their teams, business development and have a dubious roadmap as well. It is necessary to dig deeper and gather evidence and resources that can unveil the real purpose of the subject coin.
5. Refer the Shitcoin Index
The FTX crypto derivatives platform has introduced an index to monitor coins that are in the same crypto pond with a low market cap. It is called the SHIT-PERP or the Shitcoin Index Perpetual Futures. It will serve as the best hedge opportunity for you to begin with.
6. Find research reports by TradeDOG
One can highly benefit by using the help of TradeDOG by reading our in-depth and lite reports on potential altcoins that are performing well. Users can visit the website at tradedog.io and find these market research reports to gain a clear understanding on whether a coin is hyped, worth investing or Hodling, will have a profitable future, among many other indicators will save you the trouble of doing the research yourself.
Pump & Dump
Next time you hear or read ‘to the Moon’, or ‘the next big thing’, be wary.
The anonymity of the crypto industry has made it a fertile ground for dishonest activities such as thefts, Ponzi and pump & dump schemes that have had an impact on the crypto space in a myriad of ways. Millions if not billions of dollars have been sent to shitcoins that brought no value to the blockchain and crypto ecosystem. No credible research on Shitcoins has been performed to date and the zone still is devoid of news until a whistle blows or investors begin to vocalize their experience on the internet.
These are individuals or organized groups who use highly secure and encrypted social apps such as Discord and Telegram to carry out their pump & dump schemes by duping unsuspecting investors. These schemes are often irresistible to refuse and that’s when investors end in a dire situation. These organizers make the most out of the schemes and earn a significant chunk of the proceeds they manage to attract. These people purport themselves to be the project’s team members who persuade you to join early and purchase tokens at a discounted price. It’s just a luring that convinces people that the price will soon rise in value post the crowdsale except these projects are backed by nothing but just a worthless Shitcoin.
Pump & Dump is a huge activity taking place in the crypto fraternity with absolutely no stringent law to repress it. All this happens by creating fake demand and inflation of buy volume to fool investors into thinking the coin is going to the moon. The coins are purchased in dimes right before the pump begins and after feeding it with hype and flowing investment the whales sell it right at the peak, thus making hefty profits. This is how entire markets are manipulated for personal gains. Sadly, all this happens on crypto exchanges as these coins are listed on them in the first place. It is very important for all to be wary of these scams and schemes that are orchestrated illegally.
To help you understand the fundamentals and repercussions of the Pump & Dump, we would need to create a dedicated article on the same which we will do if our users want. Keep track of our blog to stay updated.
Here’s an example of a Bitcoin graph compared with Verge which reveals just how important is community engagement and adoption by a broader consumer base.
Bitcoin was created in 2009, since then it has come a long way and has given a huge 9,150,088% return on investment to this date. It has kept its promise of the store of wealth for the masses. With more than 60% market dominance, it has gained considerable adoption and continues to intrigue the traditional investors as well. The community engagement and its patrons will keep it dominant until perhaps the last bitcoin is mined.
Here’s a snapshot of the investment of the decade- the bitcoin- and the ROI it gifted to its early investors.
A visual of the best investment of the decade by Howmuch.net
Verge or XVG, as seen above, gave a return of almost 702% but seeing the graph we now surely know that it was indeed a pump and dump scheme into play. The above peak occurred in 2017 when the entire crypto markets reached close to a trillion dollars and before that Verge was sitting ducks and doing relatively nothing before it began surging.
Undelivered promises, no potential use or functionality and no actual roadmap narrow the coins’ survival in the crypto arena. In a report released by ICO data, it has been revealed that out of total projects that emerged in the ICO golden age, only 4–5% only managed to reach the exchanges to begin trading. The rest just faded away with time as 83% of the projects used to go defunct as opposed to the remaining percentage which was either upfront scams or Shitcoins.
Visit our social channels to see how TradeDOG can flag these Shitcoins and help you make calculated and risk-averse decisions whilst trading or investing.
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