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How to recognize a shitcoin from 10 km away?

Education

5 min read

A Shitcoin? Literally, it means a shit token in French.

With the success of Bitcoin, thousands of cryptocurrencies have appeared on the market. And let me warn you right now, their value isn't always there. In fact, a term has even been coined to group all these coins and tokens with no real substance…

When it comes to cryptocurrency investing, shitcoin is a bit like a rotten apple. It looks great on your greengrocer's stall, and he seems eager to sell it to you at a ridiculously low price. But as soon as you get it home, the worm pops out of the fruit, and you realize you've been had.

So how do you spot a shitcoin, in an ocean of more or less solid crypto, and projects that are too good to be true?

As you might expect, most cryptocurrencies will have at least one of the characteristics of a shitcoin . But if it ticks more than two of the criteria on our checklist, the best thing you can do is pass.

What is a Shitcoin?

The term "shitcoin" refers to a cryptocurrency with little or no value. It is therefore a pejorative way of referring to altcoins or cryptocurrencies that were developed after Bitcoin began to gain mainstream acceptance.

poocoin site to find shitcoins — Poocoin is a site where you can find all the new newly issued tokens. There are also a lot of shitcoins there.

The low value of a shitcoin is often due to the loss of interest from investors, who eventually realize that the project has no solid foundation or objective, and that its price was based solely on speculation.

In the long run, a shitcoin will therefore always prove to be a bad investment.

How do shitcoins work?

To identify a shitcoin, you need to know a little more about how it works.

After the success of bitcoin, many companies looking to take advantage of blockchain technology launched their own altcoins. Most often, they announce the final number of coins made available.

Setting a supply limit creates scarcity . More coins would theoretically dilute the value of their holdings, in the same way that a new issue of shares can cause their value to fall.

With a fixed supply, the value of a shitcoin should depend on demand. But since most cryptocurrencies have limited practical use, their values are based on pure speculation. A shitcoin is therefore a cryptocurrency whose value rests solely on its existence.

How to spot a shitcoin?

Shitcoins are easy to identify because they almost always follow the same pattern. Their price will increase exponentially over a short period of time as investors start to jump on board. But this rise will also be quickly followed by a precipitous fall . A fall caused simply by the fact that these same investors abandon ship and sell their coins to capitalize on short-term gains.

To spot a shitcoin, before you find yourself all alone on the raft of the Medusa , pay attention to the following signs.

Developers like to cultivate mystery. A solid project is carried by people known for their expertise or experience. If the developers have identified themselves by video on Instagram or Youtube for example, we no longer need to " doxxer"Now that everyone knows what they look like, they're less likely to hit the jackpot.
The project holds big promises, but has no defined functionality. An NFT project that promises to pay out $1 million to these members? A project that only talks about return on investment? Promises….Everyone can make big speeches. It remains to share the roadmap which will clearly show how the founders intend to achieve their objectives. If a project avoids the question of its functionality, there is a good chance that it is a shitcoin.
Some aspects of the project seem copied from other corners. If the white paper looks suspiciously like that of another popular project, it was certainly copied and pasted to entice investors to get involved. The problem is not copying, the problem is not adding anything else. This is a sign of shameless nonsense.
The liquidity pool is too low. If the project you are investing in does not have a pool of at least $50, it is probably a shitcoin. Worse still, if the TVL is not growing, it is because thesocial engagement is weak among others and that many have spotted the shitcoin.
The community around the project is non-existent. Most cryptocurrencies with a market cap of several million will have tens of thousands of followers and an ultra active community on the networks. If no one is talking about it, ask yourself the right questions.
Tokens vs. Coin : It is quite easy to create a token on a blockchain compatible with smart contracts like Ethereum or Solana. But creating a cryptocurrency coin requires a lot more money and time. These types of investments will increase the likelihood that the crypto in question is not a shitcoin.

The sketch of a typical shitcoin

Do you feel better equipped to spot a shitcoin?

The idea is not to proceed blindly, but to ask yourself the right questions before investing . To avoid bad apples, the best approach is to create a profile of the potential investor.

Remember that a typical shitcoin:

Has no clearly defined function or utility;
Is a (pale) copy of an existing project, which brings nothing new to the market;
Has the typical consequence of a PUMP and DUMP. A shitcoin has such a low market capitalization that its price can be manipulated by investors (we are talking about increases and decreases in its value of several hundred percent).

Final word on useless tokens

A shitcoin often looks like a "normal" token. For some, it's even very difficult to detect them. Developers do everything to look normal.

In a few years, you will see that many cryptos and NFTs that are trending today will no longer exist…

Similarly, be wary of what influencers tell you. Very often, they are no more informed than you. Worse, they may well be paid to promote these things and are shamelessly raking it in.

Once they get their community to invest in this shitcoin, they will delete the video.

Trust only yourself. DYOR once again.

Feel free to read our article to learn how to perform fundamental crypto analysis…

Note: No financial advice is given in this or any other article on zonebitcoin. This is information of which you are the sole judge and master. Be responsible with your investments and only invest as much as you are willing to lose.

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