What is a Shitcoin and which coins are labeled as such?
Ever came across this term on social media conversations or crypto-related forums? Well, you will now know what the term stands for.
What is a shitcoin?
A shitcoin is a cryptocurrency that, according to one’s subjective opinion, is a bad investment choice. The term is also used to describe coins that do not serve a particular purpose.
Why do people refer to certain cryptocurrencies as shitcoins?
There is no particular reason for the creation of this acronym. As conversations in forums and in social media tend to keep wordings relatively short, it would potentially take a long time to write that a coin “is a bad investment”. For that reason, crypto-investors (especially beginners) gradually formed the term by connecting the words “shit” and “coin”.
How do I recognize a shitcoin?
While the market tends to be turbulent in nature and all coins go through cycles, one can discover the true nature of a coin by looking into undelivered promises, lack of usability or functionality and the purpose the coin is trying to serve.
Where to buy shitcoins?
Shitcoins, which in their grand majority are simply small-cap altcoins, can be purchased on several big cryptocurrency exchanges.
Of course, as aforementioned, shitcoins are always subjective, and it’s thus impossible to give specific guidelines as to which platform you can use to obtain them (if this is your goal).
A rule of thumb is to look from platforms that are specifically designed for traders who like to swing trade cryptocurrency. Platforms like these include Binance, Bittrex, and other legit exchanges. Make sure to transfer the coins out of your exchange wallet as soon as you obtain them.
Why you would want to buy shitcoins
Small-cap altcoins may be the most “high-risk, high-reward” investments you could potentially make. There is a very big chance that you will lose all your money. However, very occasionally, you may find yourself in one of two situations:
- The shitcoin you hold becomes a victim of a pump & dump scheme
- The shitcoin you hold is actually not a shitcoin and you become what is known as an “early adopter”
Both of those cases can be very profitable if you have set clear goals for the moment you wish to sell. On some occasions, a minimum investment could bring you the biggest returns. Just make sure you have clearly identified your goals and remain emotionally unattached to the coin.
A good example of this phenomenon was the impressive rise of value in XVG, a privacy coin that many people regarded as a shitcoin. In a short amount of time (~1-2 months), the cryptocurrency increased in value by almost 8000%, making a small number of believers very very rich.
Of course, since the coin had no product and was overhyped, its price quickly dropped back to its initial value.
Best practices for buying shitcoins
Before you go ahead and purchase cryptocurrencies that are relatively unknown or hated by the community, conduct in-depth research to better understand its short and long term potential. Then, after you feel confident that a particular coin could increase in price, start by investing a small amount of money.
Observe the market for a while and determine whether your initial speculation was correct. If not, you will be forced to make a hard choice: Either you sell your coins and take a small loss, or you keep them and wait for a potential appreciation in their price.
If the price starts to increase, it’s best to take profits or at least you initial amount out and keep riding the uptrend. Conversely, and if you are fully aware of the risks, you could also invest a larger amount when a clear signal indicates a buying opportunity.
Finally, as mentioned above, always remember to control your emotions. Small-capped coins are often seen as opportunities due to their low price. As such, many people create unrealistic expectations and end up losing a lot more than they invest.
And that’s it! We hope you found what you were looking for and are looking forward to your comments. If you have anything to add, please let us know so we regularly update the post as needed.