Meme Coins or ShitCoins are online-created, popularized pictures, videos, and other items of media that frequently gain a life of their own by spawning jokes, funny captions, or copies of themselves. Memes have the potential to go viral on social networking sites like Facebook or Instagram, getting millions of views in a matter of hours.
Meme coins are essentially cryptocurrencies that were motivated by online phenomena like memes and internet jokes and have increased in value in recent years. This description of a “meme” from the dictionary applies to them as well. To know more about this topic, read below!
But if cryptocurrencies continue to grow in acceptance as a substitute form of payment, it’s probable that meme coins will eventually be worth much more since there are a growing number of investors prepared to put money into them.
Even so, invest at your own risk because there is no assurance that cryptocurrencies or memes will continue to gain in acceptance or value, despite the possibility of significant profits. Therefore, do your study and make sure you are aware of the risks before investing any money in meme coins.
What Exactly Is Meme Coin or ShitCoin?
ShitCoins are technically altcoins, but as a result of their fundamentally flawed design, they lose value over time. The coins have no obvious purpose and are of little to no value. They extensively rely on deceptive marketing, mostly through a network of social media micro-influencers.
Are ShitCoins inherently bad?
Not always, since some of them have tremendous community support. Consider Dogecoin, which was created as a parody of Bitcoin and never intended to have any practical use. However, during the 2020–21 bull run, a robust network of Twitter warriors and influencers like Elon Musk boosted it to new ATH levels.
Any ShitCoin project falls under one of the two categories listed below:
1. Rug pulls
In the appropriately termed “rug pull,” a cryptocurrency team drops a project after receiving a significant investment from the investors, leaving them with worthless tokens. Rug pulls frequently occur, mostly in DeFi projects, on decentralized exchanges (DEX).
Developers can publish and list their tokens on decentralized exchanges (DEX) without doing the appropriate audits or vetting processes. A DEX (like Uniswap or PancakeSwap) allows malicious developers to advertise their tokens and match them with ETH or any other popular cryptocurrency. For investor confidence, they also offer liquidity and lock in a limited amount of money.
Now, this is where a rug pull comes in. The developers then withdraw all the liquidity (ETH), leaving investors with worthless tokens, after a significant number of investors exchange their ETH tokens for the listed token.
During this procedure, the mentioned tokens’ values soar by up to 50X or even 100X in a matter of hours. Fear of missing out (FOMO) impact is produced by the quick increase in value, attracting new investors. The team removes all of the liquidity if the value reaches the ceiling.
2. Exit Scams
Rug pulls and exit scams are similar, however, exit scams don’t entail drawing out any liquidity because they often don’t take place on a DEX. The team instead starts a project with a coin, which is often a fork, whether a soft fork or a hard fork, of an already established project. They start the project, make the coins available, and then vanish.
In 2017, at the height of the ICO craze, many exit scams were committed. A typical exit scam involves the creators cloning a popular project, making minor changes, and rebranding it. They then sell the coins through their platform in exchange for ETH, BTC, or any other popular cryptocurrency.
How Do You Know If a ShitCoin Is Good?
Now let’s discuss the “good” ShitCoins. These ShitCoins are beneficial in terms of perceived value even if they cannot be compared to some of the top cryptocurrency projects.
Meme Coins are a subtype of ShitCoins named after popular internet memes. Micro-influencers actively promote Meme coins on social media sites like TikTok. They have been acknowledged by several of the top aggregators, including CoinMarketCap, as a separate category. The Shiba Inu dog, nicknamed the “meme of the internet” back in 2013, served as the inspiration for the Meme coin known as Dogecoin.
The Background of ShitCoins
The word “ShitCoin” is no different from the majority of other crypto terminologies, such as HODL, and altcoins, which originated in discussions on the well-known Bitcointalk forum. No pun intended. It was first used on November 8, 2010, in a topic on the Bitcointalk forum started by Gavin Andresen, who was previously referred to be the face of Bitcoin.
You might be shocked to find that Nocoiners all referred to several popular cryptocurrencies as “ShitCoins,” including Bitcoin, Litecoin, and Ethereum. The founder of Litecoin, Charlie Lee, once declared that his cryptocurrency is the finest ShitCoin available in an interview and on his Twitter account.
ShitCoins Price Habits
ShitCoins see a big price increase when they are first released, but over time, they frequently have flat-line charts without any pulse. Let’s examine SALT and PPT as two such instances.
- SALT: SALT was selling for roughly $8 at the time of its introduction. It achieved its pinnacle with an ATH value of $16 within a month. Thoughtful 100% return, what transpired next? The crew gave up on the project, leaving it with no apparent pulse and a current value of slightly over $0.30.
- PPT: PPT is another ShitCoin. Initially trading at $1.90, it unexpectedly rose to an ATH value of $74.85 within two months. That’s a significant return that also shows potential for the future. The PPT team, however, abandoned the project after that, and things went poorly from there, resulting in a flat line chart. PPT is still in use and is now valued at slightly over $2.50.
Some ShitCoins do, however, manage to survive and even thrive thanks to a strong and active community. When it was launched in 2013, the well-known Dogecoin was viewed as a joke since it was only worth a few cents. Celebrities and influencers, on the other hand, chose Dogecoin at the beginning of the 2020 bull run and greatly inflated its profile. In a short of months, Dogecoin increased by more than 12,000%.
DOGE has gained a lot of Twitter traction. The “DOGE-1” satellite will really travel to the moon when it is launched, according to Elon Musk, the CEO of Tesla and SpaceX. The name is fascinating in and of itself, and the DOGE coin was used to pay for the entire satellite project. Who would have imagined that a joke-based Meme Coin would reach the moon?
Because of Dogecoin’s unbelievable success, a lot of the ShitCoins that are emerging these days follow the Meme Coin craze. These Meme Coins or ShitCoins provide a huge return in a relatively short amount of time, unlike other well-known cryptocurrencies like BTC and ETH. However, the majority of them have little to no liquidity, making it impossible to pay them out.
Is Investing in ShitCoins a Good Idea?
The term “risk-return tradeoff” refers to the idea that, as risk is raised, the likelihood of a prospective return also increases. ShitCoin investing is a high-risk/high-reward endeavor. You might fast make a significant profit or lose a significant portion of your money.
Dogecoin and Shiba Inu are two examples of Meme Coins or ShitCoins enterprises that generated returns of over 12,000% in a short period of time, but there are other projects that lost all of their value a week after their overly-excited debut. Though the danger is always present, the benefits can be substantial.
One crucial parameter that you should take into account in addition to a solid technical analysis is the community.
Projects using ShitCoin that are successful in making a profit are supported by the underlying community. This refers to backers, famous people, and influencers who boost the value. It is quite difficult for those Shit Coin initiatives that are still relatively fresh to establish a solid community. Older enterprises that have a history or a legacy have an advantage when it comes to fostering a sense of community. They may be worth checking out as a result.
How To Identify Genuine Coins From ShitCoins
The tactics used by scammers and ShitCoiners are continually evolving. To reassure investors, these coins might closely resemble real coins. Here are some traits you might look for to identify a ShitCoin:
1. The project’s history and the team
The team behind a cryptocurrency is what most distinguishes it from a ShitCoin and a legitimate coin. Before making an investment in any project, you should research the team members’ educational and professional credentials. ShitCoin initiatives frequently include dubious team members with no prior employment history and maybe fraudulent social media accounts made just for the project.
2. Whitepaper and Supporting Documents
In contrast to legitimate currencies, ShitCoin ventures lack the necessary paperwork (like the white paper). Their claims are imprecise and contain deceptive assurances about the future.
Legitimate coin initiatives don’t discuss token prices and instead place a strong emphasis on documentation. Instead, they concentrate on the underlying technology, particularly how they plan to advance it over time to boost consumer acceptance of their goods. ShitCoins don’t just concentrate on token price; they also have very minimal documentation.
3. Consult the Community
Every authentic coin has a robust and active community. While the owners of terrible ShitCoins don’t put much effort into their community development, substantial ShitCoins like DOGE are also supported by the community. There is always the chance that they may try to pull a fast one as soon as they can to get money from investors.
The passion for ShitCoin isn’t going to abate any time soon. Make sure to do your thorough due diligence to separate the good players from the bad ones before investing in a ShitCoin enterprise. Even if some ShitCoins are made as a joke, they could nonetheless want to develop a vibrant community. Others are designed with the intention of stealing investors’ money.
Investing intelligently can help you avoid losing a significant amount of your hard-earned money since ShitCoins have a very high risk/return ratio.