Trying to define what a shitcoin is can be difficult. If you ask a Bitcoin realist about the term, he will tell you that every alternative currency can be classified as a shitcoin. On the other hand, Ethereum supporters will refer to Bitcoin (BTC) as “shitcoin” due to the limited number of applications for the basic coin. Even top-tier cryptocurrencies, such as Ripple, have been labelled as shitcoins due to the network’s extreme centralization.
What exactly is a shitcoin?
Nonetheless, if we remain truthful, we may be able to provide you with a detailed description of a shitcoin. A “shitcoin” is a cryptocurrency that has no intrinsic value or purpose. Shitcoins can even be harmful to prospective investors because they will imitate successful ventures while lacking the underlying principles to back them up. They could have simply been designed to defraud individuals of their funds and deceive naive traders with pump and dump schemes.
It is frequently used to refer to other cryptocurrencies or tokens that emerged due to Bitcoin’s popularity. Shitcoins frequently lose value due to waning investor interest, either because they were not launched in good conscience or because their pricing was based on speculative activity. As a result, these coins are regarded as risky investments.
Shitcoins are easy to identify because they have a recognisable pattern. Although a coin can generate a lot of interest when it is first introduced, its price usually remains fairly stable. However, as more traders jump on board, the price quickly and dramatically rises. Following that, investors sell their coins in order to realise short-term profits, causing the value to plummet.
How Did Shitcoins First Appear?
Dogecoin and other meme currencies are prime examples of shitcoins. The DOGE cryptocurrency was created as a joke by its creators. They intended to mock bitcoin’s extremely sober profit-making capitalist ideas. As a result, they issued a low-value cryptocurrency with an unlimited supply. However, things went horribly wrong, and DOGE quickly became a hugely popular way of making money.
Dogecoin has evolved into the prototypical shitcoin, all froth and no purpose, thanks to the involvement of social media influencers such as Elon Musk. Despite having poor fundamentals, the value of DOGE had risen primarily as a result of the hype surrounding it.
Worse, as a result of this craze, hundreds, if not thousands, of copy meme coins, such as Shiba Inu, Floki Inu, and other puppy-based coins, were created. The majority of these coins are significantly less valuable than Doge because there are quadrillions of them in circulation and a completely controlled supply.
You should be aware, however, that shitcoins are more than just meme coins. They unfortunately cover a wide range of the cryptocurrency industry and aren’t always so transparent.
Shitcoins account for a sizable portion of the cryptocurrency market. Because of the allure of making huge profits with a small investment, these currencies are spreading like weeds. However, they remain high-risk assets, so the fewer shitcoins you have in your portfolio, the safer it is. Although certain NFTs raise ethical concerns, shitcoins do not because they are inherently unethical.