2021 was probably the most explosive year for cryptocurrencies. As a whole, their combined market cap reached upwards of $2.2 trillion in October, as opposed to the $770 billion they started the year at. This can be attributed to the widespread adoption of these currencies from all over the world. At the moment, there are more than 16,000 cryptocurrencies in existence. Some of these are tokens with real-world use cases, while others began as a joke but somehow managed to gain traction and rise in value. The latter is colloquially referred to as shitcoins.
Essentially, a shitcoin is a crypto token that does not serve any specific purpose. Typically, these coins are characterized by low value, or at the very least, a depreciating value. They also feature very low trading volumes, which serves to reduce their liquidity. Additionally, they will seldom feature in the top 100 coins by market cap list. However, some Bitcoin fanatics will refer to every other altcoin as a shitcoin, following their belief that no other coin will ever measure up to BTC in superiority.
How to identify a shitcoin
Typically, shitcoins will display some identifiable characteristics. Let’s look at them below.
- Ambiguous developer team
Usually, most shitcoins end up being rug pull scams. For that reason, the developer team behind such projects tends to hide behind a cloud of anonymity and ambiguity. What’s more, they tend to use pseudo names rather than any confirmed identities. Before you invest in a shitcoin, you should ensure the team behind it is publicly known, which speaks to their trustworthiness.
- The project whitepaper seems copied or generic
If a coin’s official website seems generic or is hosted on a free domain, it shows the project is not particularly well developed. Similarly, if the project’s whitepaper seems similar to that of other developed projects, then the team behind the shitcoin may have copied it to breed a false sense of trustworthiness amongst investors. Another trick shitcoin developers pull is making their whitepaper overly complex with unnecessary technical jargon.
- The coin has a small number of holders
Any viable coin should have at least 300 holders. This shows that investors have faith in it, and you’re not trading against the majority of the market. Such a coin’s network should also have a minimum of 10 transactions per minute. What’s more, its liquidity pool should have at least $30,000 in order to facilitate easy trading of the coin.
Shitcoins to keep tabs on in 2022
Dogecoin was the first meme coin to launch. It is a meme coin because it was inspired by a Japanese dog breed that was the subject of an internet meme at the time of its inception. Though the developers made it for fun, the coin went on to attract notable investors such as Tesla CEO Elon Musk and Vitalik Buterin, one of the co-founders of Ethereum. These two billionaires currently serve on Dogecoin’s board.
Elon Musk has publicly declared his support severally through his tweets, which seem to have considerable influence over Doge’s price. What’s more, the coin’s blockchain is set to switch from the proof of work consensus model to the far more efficient proof of stake. With these developments, this coin will likely hit $1 in 2022.
This is a decentralized finance (DeFi) token. Established in 2021, it is currently the 215th largest cryptocurrency, with a market cap of $817.5 million. SafeMoon is hosted on the Binance Smart Chain, which is one of the largest DeFi blockchain networks. The token serves three major purposes: reflection, staking in liquidity pools, and a periodic burn.
Recently, SafeMoon made headlines when it garnered the support of celebrities like Logan Paul, a popular YouTube sensation, and Lil Yachty, a rapper. These celebrities have also helped push its catchy tagline “Safely to the moon,” which has contributed to its popularity. The token is also set to launch an NFT marketplace in the near future.
3. Dogelon Mars
This is another token riding on the wave of Elon Musk’s influence and inspired by the Shiba Inu meme. It is hosted on Ethereum, which means its transaction fees are quite high. However, this also speaks to its credibility, as Ethereum is a highly secure network. What’s more, the developers of this coin aim to make it the first interplanetary currency, following Elon Musk’s dream to colonize the planet Mars. At the time of writing, Dogelon Mars ranks 125th largest cryptocurrency by market cap.
4. Baby Doge Coin
This is a token that is marketed as the progeny of Dogecoin, the original meme coin. To that end, it enjoys spikes caused by Elon Musk’s tweets promoting the latter token. What’s more, it boasts faster transaction speeds than its predecessor. Holders of Baby Doge Coin are also rewarded through its static reflection feature. 5% of the transaction fees from the network are redistributed to holders’ addresses.
5. Floki Inu
This is another token inspired by the Shiba Inu meme and named after Elon Musk’s pet dog, Floki. The developers of this project hoped that every time the billionaire tweeted about his pet dog, their token’s value would rise. Their hopes proved true when the Tesla CEO announced the adoption of Floki, a rescue Shiba Inu.
This token is also associated with several projects, such as their partnership with the Million Gardens movement to solve food insecurity. This project is run by Elon’s brother, Kimbal Musk. The token also has an education platform called Floki Inuversity, a merchandise marketplace called Flokiplaces, and an NFT gaming platform called Valhalla.
Shitcoins are tokens that do not serve a discernible purpose but instead gain their value from the hype associated with them. Be that as it may, there are several shitcoins with the potential for growth, as they tend to solve particular issues with the mainstream cryptocurrencies and thus have real-life utility. However, investing in shitcoins is a risky endeavor, and our recommendations in this article should not be construed as investment advice.