Before jumping into this topic, let's define the term 'shitcoin':
- For most of the people, shitcoins are cryptos which have no real utility. For instance, meme coins like DOGE or SHIBA INU would be shitcoins. However, most of the crypto hodlers, and particularly Ethereum (ETH) owners, also include centralized cryptos like Ripple (XRP) in that definition. More generally, the term 'shitcoin' could be used for all the cryptos which are supposed to fail in the long term because they lack fundamentals.
- For Bitcoin (BTC) maximalists, the term 'shitcoin' is used to call everything else besides Bitcoin (BTC) - including Ethereum (ETH) for instance.
- For some anti-coiners, Bitcoin maximalists would call other cryptos shitcoins because they would be unaware Bitcoin is the worst shitcoin...
The term 'shitcoin' looks quite subjective: for instance, how can we say that DogeCoin (DOGE) has no utility if companies accept DogeCoin payments?
Therefore, instead of 'shitcoins', I propose to use the term 'pump and dump coins', which are low market cap coins that are susceptible to high volatility.
So, should you buy 'pump and dump coins'?
Short answer: no, unless you want to spend your life on Twitter and lose money. Most of these coins are purely manipulated scams:
- Phase 1: a small team creates a new coin - e.g., on Binance Chain, and shill it on social networks - e.g., on Twitter & Telegram.
- Phase 2: they make it pump by buying a few bags of it before putting the official launch announcement on social networks.
- Phase 3: due to greed, FOMO (Fear Of Missing Out) and cascading effect, other people buy it and make it pump further.
- Phase 4: when it is close to All-Time-High, it is time for the small team to massively sell the coin and to make it dump.
- Phase 5: once it has dumped, the poor guys who kept it will hodl it for months or years, thinking it will pump again...
Why do people buy these coins?
It typically happens when crypto market stagnates or declines, when people want to compensate the losses they had on the coins they initially bought. The best way to avoid this is to remain patient. Crypto market includes bullish and bearish phases. The patience allows to win in most of the cases.
Instead of buying 'pump and dump coins', one option is to accumulate undervalued tokens. Please note: it is not a financial advice. Please DYOR.
Please find below a few links to earn a few coins...