What Are Shitcoins? PointPay Experts About Trends and Hype Around Crypto
As cryptocurrencies continue to generate widespread interest and expand as currencies of the future, more and more meme tokens or coins with no apparent function appear on the market. So while the majority of cryptocurrencies serve a purpose for an associated blockchain or decentralized application, some tokens hold no real value at all. These coins are usually called ‘Shitcoins.’ However, PointPay experts believe this term is quite subjective. It can also be used to describe potentially undervalued projects or projects with a low market cap.
Let’s find out more about those shitcoins and hype around some of them. Learn more with PointPay!
PointPay experts: What are shitcoins?
“Shitcoin” is a cryptocurrency that is useless and has no value. These cryptocurrencies were created as imitators of projects with real value. They generally do not bring anything new or valuable to the crypto space, and they don’t have clear goals. Unlike Bitcoin (BTC) or Ethereum (ETH), which have specific, defined purposes and innovative goals, shitcoins lack functionality. PointPay experts believe that for this reason, they do not have the durability or the longevity of other tokens. However, there is no specific definition as a shitcoin can be just a copy of another well-known coin or a brand new project.
Since shitcoins have no meaningful purpose, there is usually no actual demand for such tokens. The value of the token depends on pure speculation. Thus, shitcoins are digital currencies that can be considered valuable simply because they exist.
For example, even though Dogecoin (DOGE) has a market capitalization of over $10 billion and a huge global following, it started off as a meme cryptocurrency. The project draws its value from tweets of one of the wealthiest persons in the world, Elon Musk. PointPay experts believe that the DOGE’s value would not be based on anything without his backing and publicly shared opinions. That makes Dogecoin a perfect example of a ‘Shitcoin.’
PointPay experts: the risks of ‘Shitcoins’
As of May 2022, there are over 18,000 cryptocurrencies out there. However, not all of them can be on the level of Bitcoin, Ethereum, or Tether. There are good and bad investment opportunities in the stock market, and the same can be said about the cryptocurrency market. Many shitcoins are created to capitalize on people who want to invest in crypto without doing thorough research. As PointPay experts have already said, the value of shitcoins is based on speculation and nothing more.
Unfortunately, many traders and investors have lost hundreds and even thousands of dollars to shitcoins. Even though purchasing cheap and unknown tokens might sound tempting, the risks of investing in crypto are similar to those of investing in the stock market. PointPay experts want to remind you that you should never invest more than you can afford to lose. In addition, doing your thorough research first is also mandatory.
Spotting ‘Shitcoins’ with PointPay
Unknown creators and developers
The people behind the project need to be trustworthy, not a random bunch of strangers using fake names. If developers have identified themselves through Twitter, Telegram channels, Discord, or Youtube videos, they usually deserve more credibility, and there is much less chance that this is a crypto scam.
Big promises but no functionality
Unfortunately, crypto scammers and fraudsters can come up with different impressive-sounding goals and promises. However, they usually can’t provide the roadmap or a White Paper of the project. If a crypto project can’t define its functionalities, it is better to give it a miss.
Too generic or copied project aspects
If a project’s official website uses a free domain, there’s no blog, and the White Paper is indistinguishable from other crypto projects, it might be a Shitcoin.
Check the number of holders and consider the liquidity pool
PointPay experts believe a new token worth investing in should have no less than 200 holders and at least $30,000. Low numbers are always red flags and warning signs.
Final thoughts
‘Shitcoins’ are risky investments for traders, and crypto enthusiasts should steer clear. However, some of them may present opportunities to make large profits. When investing in tokens without clear value, ensure you understand the short-term potential. Do your thorough research first, invest only small amounts, and beware of deals and offers that sound too good to be true.
Stay safe with PointPay!
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