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I serve this article as my Beginner Level Homework. The class I attend is taught by Professor @nane15 with the topic of What Is Shitcoin and How To Profit From It.
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1. Explain your understanding of what a Shitcoin is.
Shitcoin is a term used from the cryptocurrency market which comes from two different words, Shit and Coin. This term sounds harsh because its purpose is to insult certain cryptocurrency projects. The crypto project dubbed shitcoin is a project that does not have crucial contributions and innovations to cryptocurrency technology. Moreover, there is a possibility that the project creator's goal is to deceive cryptocurrencies investors. It is because Shitcoin or Altcoin intends to imitate the success of Bitcoin without proper preparation. Without clear fundamentals, the asset value of shitcoin is very doubtful. In other words, Shitcoin is a type of cryptocurrency that has poor fundamentals, and the price is extremely volatile.
The future of the shitcoin market depends on investors' speculation alone. Therefore, if the hype coin goes down, its value also decreases. The price of the shitcoin asset was relatively stable when it was launched in the crypto market. It is followed by speculation that suddenly increased and made prices increase significantly. However, after that, the price will move against the trending market. Market patterns that can change in a short period like this are how investors identify the Shitcoin cryptocurrency.
It seems impossible to find any developers or companies who create hype cryptocurrencies for short-term purposes. As we understand, most relatable surveys show the predictions of the crypto market throughout the year will increase. This indicates that cryptocurrency enthusiasts will also increase. Thus, designing a short-term cryptocurrency project is a detrimental project investment for anyone who set it.
2. Do you think it is possible to profit from investing in Shitcoins?
As mentioned before, shitcoin trading is only based on the hypotheses among the investors. The price will rise when the assumption among investors rises. As a contradiction, the price will fall when the speculation of the crypto project sinks. In other words, it is possible to profit from investing in Shitcoins when it is getting a promotion.
Because the price of shitcoin is low and the supply of tokens is high, the investors of this coin have the opportunity to profit. With little capital, they can make considerable profits. However, this kind of investment must be carried out with a specific strategy. Investors who fast enter the shitcoin market will accumulate more profits. For example, a trader buys 1 million shitcoins for USD 10. He is likely to make a big profit because the coin's price can increase significantly even more than 100%. From the USD 10 capital earlier, the trader can make more profits in a short time as the market for the coin will increase concisely. But, it is a different story if investors are late in entering the market. They only waste their time, money, and efforts.
However, Shitcoin is a newly launched crypto project. In addition, it has no clear fundamentals. It is also possible that the price of the shitcoin will even decline. Besides, the project could be a scam. If it is a scam, the project's owner could delete it after investors buy the coin. In the end, they couldn't sell the coins they bought.
Below are fundamental aspects that investors must consider in choosing a shitcoin project because it could be a scam:
The project is shitcoin, if the whitepaper on the project is an almost identical copy of another known project, has many writing errors, or does not even have a whitepaper.
Be careful with the professional detail of the project developer. The shitcoin development team consists of a small group of strangers that used an unusual name.
Unofficial site using a free domain. The project plans and objectives were not well presented and designed.
The promised target is too good to be true.
3. List advantages and disadvantages of investing in Shitcoins.
As I mentioned earlier, investing in shitcoins may or may not be profitable. Here, I will list the advantages and disadvantages of investing in shitcoin projects.
Advantages
Shitcoin's price was very cheap at launching time. Therefore, investors are likely to buy shitcoin assets with small capital.
There is no limit on the number of coins. Traders can buy as many shitcoins as they want because there is a lot of supply. Shitcoins are not like Bitcoin which has a limitation, around 21 million merely.
Opportunity to profit in a short time. Although the price of shitcoins is low-cost at the beginning of the release, the price will likely rise to more than 100% quickly. Therefore, traders have the opportunity to make big profits.
Does not require too much amount of capital. If the crypto coin market like Bitcoin requires at least USD 100, we can get a lot of digital assets for as little stock as USD 10 in the shitcoin market.
The market can be pumped by the community. It is because shitcoin price movements are based solely on speculation. Thus, we can promote the project's shitcoin by inviting many investors into the coin market.
Disadvantages
The volatility is too high. Since price movements on shitcoins are only based on investors' speculation, prices may fall unexpectedly.
There is no clear future. Shitcoins is a weak crypto project because it doesn't have solid fundamentals.
Lots of scams within shitcoin projects. Therefore, traders should be careful when choosing shitcoins.
Shitcoin projects are not available on certain exchanges. Traders or investors should look for the specific exchanges that provide shitcoin projects.
4. Of at least 3 examples of Shitcoin that have been a scam, also explain what they consisted of.
I found three scam tokens list from articles I read, they are:
- Squid Game Token
- Baby Doge BNB
- Baby Panda
SQUID GAME TOKEN
Squid Game Token has been reported as a scam coin for committing fraudulent actions. The total loss of this coin is around USD 3.38M. The price of this coin had gone up for a week due to the prestige of the Korean film Squid Game on Netflix. However, it dropped to USD 0. It happened because the SQUID token creator did a rug pull movement where the token creator cashed out all SQUID tokens into fiat money.
The entire site, social media, and SQUID whitepaper were deleted after the token price became USD 0. Actually, the quality of the whitepaper on the SQUID token is very bad because it has many errors in writing. This is one of the characteristics of a token scam.
It was deployed on Binance Smart Chain (BSC BEP-20), Jan-01-2022 08:01 GMT. The total supply and circulating supply of the token are 10,000 SQUID.
It had been listed at some exchanges such as Mdex, BSCswap, Anyswap, and many more.
BABY DOGE BNB
The Baby Doge (BNB) coin experienced a price increase after its release because Baby Doge claims that they are the successors of Dogecoin, a successful shitcoin. It deployed on Binance Smart Chain (BSC BEP-20) too, on Oct-23-2021 05:08 GMT. Both total supply and circulating supply are 100,000,000 BabyDogeBNB.
It had been listed at some exchanges such as Mdex, BSCswap, Anyswap, and many more.
BABY PANDA
Baby Panda coin has also been reported as a token scam. What's more, the price of this token reaches USD 0. Similar to the two scam tokens above, Baby Panda is also deployed on the Binance Smart Chain (BSC BEP-20). The date deployed was on Jan-04-2022 19:23 GMT. The total supply and circulating supply is 100,000,000,000 Baby Panda.
5. Explain at least two examples of Shitcoin that have been successful and are currently keeping it. (Other than Dogecoin or Shibainu.
I will explain two examples of Shitcoin that have been successful.
FLOKI INU
Floki Inu token is a shitcoin inspired by Dogecoin and Shiba Inu. Despite being a shitcoin, the Floki Inu token increased 200% and organized massive marketing. In addition, the token ecosystem is quite clear, for example, to pay for the Valhalla non-fungible token (NFT) metaverse game.
Floki Inu's whitepaper also explained that the crypto coin name comes from the name of a Shiba dog belonging to Elon Musk, a famous businessman today. The token is also sold on the Floki Places marketplace and has a content platform anointed Floki Inuversity.
SAFEMOON
SafeMoon coin is often juxtaposed with Dogecoin. Furthermore, it is gaining a good reputation as SafeMoon provides a different approach than Dogecoin or most other cryptocurrencies. SafeMoon coin does not make a quick trade. For instance, people can sell it and earn a profit for a day. This coin will be more profitable in long-term trading.
In addition, SafeMoon also offers a condition where half of the 10% fee, rewards from SafeMoon, will be sent to SafeMoon coin holders who receive additional coins as rewards.
Moreover, some investors agree that SafeMoon coin has a much higher potential return than Dogecoin, but the investment risk is also high.
6. Perform a historical analysis of the prices of any of the cryptocurrencies that you chose for the previous question. (Use screenshots.)
John Karony and his team launched the SafeMoon project on March 8, 2021. We can see from the historical data, the value of a SafeMoon coin has increased since it was first released.
In the chart on coinmarketcap, SafeMoon's open price is $0.001639. The highest price is $0.00188, whilst the lowest is $0.001536. The coin cap price is $0.00162, and the total volume is USD 837,043. This is the data as of Dec 16, 2021.
The price of the SafeMoon coin was quite stable around $0.001534 to $0.001581 for several weeks. Then, the price fell drastically to $0.0006284 on 23 December 2021. However, the price jumped suddenly to $0.001656, still on the same day.
Then, the price skyrocketed from $0.001588 to $0.007232 on 4 January 2021. After that, the price went down gradually to $0.00267 with a volume of USD 1,785,167.
From the SafeMoon price statistics for today, the SafeMoon price is $0.002646. It increased a bit by 5.02% for the last 24 hours. However, the trading volume decreased by 14.46% for the last 24 hours. Currently, its Market Ranks is #3176 while the market cap is $2,375,135,803.75, declined by 2.83%.
7. Based on your previous analysis, what do you think will be the evolution of the price of the cryptocurrency for this year? Be creative when explaining.
In my opinion, the price of SafeMoon may go up as a whole because we can see from the chart, the initial cost and today's price have increased. Nevertheless, it is important to note that SafeMoon is a shitcoin where speculation and hype among investors is a strong aspect that influences the price action.
Additionally, investors also think that SafeMoon is a good shitcoin for long-term trading. Therefore, the SafeMoon market may be in a bullish market in the future. In short, as a shitcoin, the SafeMoon market does depend on speculation among traders or investors. If SafeMoon can maintain its reputation like Dogecoin or Shibainu, it may survive in the crypto market even it is a shitcoin project.
8. Conclusion
Shitcoin is a cryptocurrency in circulation, but its future is ambiguous because the fundamentals lack. We can identify shitcoins by looking at their coin prices and market pattern. The price is relatively very cheap because of its small capitalization. In addition, the supply of coins is also high. Therefore, investors can buy coins in large quantities at low prices. The market can grow, then fall quickly.
Investing in a shitcoin project is very risky because it could be a scam. However, many investors are interested in buying the coin because of the possibility of making big profits in a short time. Investing in shitcoins is not recommended for novice traders. Moreover, there are many shitcoins projects. Among the projects, there are scams but also projects that are successful. Anyway, if anyone still wants to invest, the investor trader must do accurate research. Thus, the investor can avoid scam projects.
Writer,
@idaali