Generally created in a fairly short period of time, shitcoins have established themselves as real millionaire forges. With sudden and dizzying price increases, they have grown to such an extent that even the bitcoin market is affected. Should we fear shitcoins or be there an opportunity? How do shitcoins affect the bitcoin market? Our answers in this mini-dossier, designed to be easily understandable even for those who are taking their first steps in the world of cryptocurrencies.
What is a shitcoin and how to recognize it?
Presented as pressing lucrative opportunities, shitcoins are cryptocurrencies carried by projects that curiously offer no technological, social, economic, etc. utility.
Very often, they are deployed according to the ERC-20 standard on the Ethereum network and launched without a white paper by a team of developers that we really cannot identify in some cases. Whether it is DogeCoin, Shiba Inu, Tamadoge, ApeCoin, or even Pepe Coin, they operate according to the same strategy, the “pump and dump”.
Concretely, shitcoins are initially sold at ridiculous prices at the rate of several trillions of units for a few cents. Then developers and influencers create hype around shitcoin to cause a sudden increase in its value which can multiply by 100%, 200%, 300%, 500% and sometimes more. A pump!
From then on, they sell all their shitcoins and make a fortune. Then, the demand for shitcoin weakens, then becomes almost zero in most cases. From then on, this shitcoin becomes useless in the wallets of holders who do not struggle to sell it.
Besides developers and influencers, many lucky investors also make a lot of money by buying thousands of shitcoins which they sell very quickly after the surge, and before demand wanes.
These shitcoins that make millionaires faster than Bitcoin: Pepe Coin, DogeCoin, AiDoge, Shiba Inu, etc.
Even though their value often suffers dramatic declines, it is important to recognize that shitcoins have enormous potential in the crypto ecosystem. For example, let’s talk about the shitcoin that has been the most talked about recently, the Pepe Coin.
Launched on April 17 only, this memecoin generated so much enthusiasm that its capitalization exceeded one billion dollars, a few days after its creation.
In 48 hours, its value soared by 505%, from $0.00000000578 to $0.0000000350, which allowed several investors who bet on this crypto to become millionaires overnight.
Even though the crypto price saw declines later on, it should be noted that while this “shitty spot” was performing such an impressive performance, the bitcoin price was falling by 6.4%.
Curiously, Pepe Coin is not the first “shit coin” to have accomplished such feats. In 2017, for example, DogeCoin, Elon Musk’s favorite shitcoin, once surged 300% in just three days.
In 2023, this same shitcoin experienced a 3,000% surge in its price, which rose from $0.005 at the start of the year to $0.1445 around mid-April. Impressive, isn’t it?
This is why shitcoins are so popular. Unlike Bitcoin, which has been growing rather slowly for several months, with a volatility that worries even some pro-bitcoins, shitcoins have the ability to grow exponentially in a few hours.
This is why many investors continue to trade shitcoin, despite having no use, no social, economic or technological value. Several other shitcoins are showing quite enticing promises for 2023. These are for example:
- DogeCoin, which is the most popular;
- AiDoge (AI) used to create memes with AI;
- Tamadoge (TAMA), DOGE’s first competitor;
- Love Hate Inu (LHINU), an innovative shitcoin;
How do shitcoins affect the bitcoin market?
The loss of trust and more regulation of the crypto sector. These are the main consequences that shitcoins produce on the Bitcoin market. Indeed, the phenomenon of “pump and dump” typical of shitcoins has caused many investors to lose confidence in the crypto sector.
Some have withdrawn completely from the market. In addition to being bad publicity for the crypto sector, these massive withdrawals tend to reduce the demand for cryptocurrencies, which mainly affects serious cryptocurrencies such as Bitcoin.
Moreover, since the number of investors who lose their savings in the shitcoin market is sometimes so high that it helps to encourage governments to put in place more and more severe crypto regulations. Unfortunately, these regulations apply to the crypto market as a whole, including major cryptocurrencies like Bitcoin.
Shitcoins remain “shitty corners”
Without a doubt, bitcoin remains the queen of the crypto sphere. It is the only cryptocurrency in which one can invest for very long periods without fearing the sudden disappearance of the project.
It is also one of the few cryptocurrencies that promises a certain increase in their long-term value and that has all the characteristics of a safe haven.
This is why some people do not hesitate to invest their savings in bitcoin to circumvent the traditional savings and investment system.
Not to mention the lack of a white paper, real utility and the mysterious nature of the developer team often make them look like scams, shitcoins have caused thousands of investors to lose fortunes.
It is therefore feared that they will undermine the confidence enjoyed by the crypto sector as a whole and serve as arguments for critics of cryptocurrencies. However, it is impossible for shitcoins to dethrone Bitcoin. Bad cryptocurrencies will never succeed in driving out the good one.
Receive a digest of news in the world of cryptocurrencies by subscribing to our new service ofdaily and weekly so you don’t miss any of the essential Tremplin.io!