Beware: You Are Entering The World Of Shitcoins

Low-value cryptocurrencies with no clear purpose, but with a luster for quick profits still flood the market

Shitcoins are always looked at as a way to make a fortune for thousand of young crypto investors
Shitcoins are always looked at as a way to make a fortune for thousand of young crypto investors

Low-value cryptocurrencies with no clear purpose, but with a luster for quick profits still flood the market

Topic in brief

  • Shitcoins are characterized by short-term price increases followed by sharp drops.
  • They are often caused by investors taking advantage of short-term profits.
  • The term is often used to describe altcoins with no innovation and little purpose. Or cryptocurrencies with really low prices (under $0.01) trying to create hype with their alluring names and big potential to grow in terms of their value.

Attracted by the glamor of the latest cryptocurrency with an attractive name launched by a crypto influencer or a hot social media pop star, the crowd of new-crypto-investors did not even think for a moment but poured another dose of dollars into the new coin. Immediately, everyone rushed to brag on forums and networks about their new acquisition, which brought more people eager for quick profits into the game. But when they woke up one day, there wasn't much left in their wallets…

Welcome to the world of "shitcoins", where new investors and those who missed out on getting rich with Bitcoin, Ether, and other meaningful cryptocurrencies are being scammed or ripped off by online pranksters pushing coins with wildly creative names and no clear value proposition. Where the psychology of FOMO (Fear of Missing Out) is used to the limit, to its full potential.

Interest in cryptocurrencies has increased significantly since the success of Bitcoin over the years. They have also attracted businesses that want to take advantage of blockchain technology to create their own altcoins. With the latest crypto crash, enthusiasm has given way to fear, but different shitcoins are still circulating, and new ones are emerging on a daily basis.

The term "shitcoin" is subjective and can refer to cryptocurrencies with no apparent function or meme tokens. It is also used to describe seemingly pointless projects or those with extremely low market capitalization. If we look for an analogy with the traditional markets - they are penny stocks, those of companies in bankruptcy, or with quite serious financial problems. The latter was the army's favorite small investors, led by the Reddit forums.

Market Capitalization of Some of The Most Popular Shitcoins
Market Capitalization of Some of The Most Popular Shitcoins

How Shitcoins Work

With a fixed supply of an altcoin, its value must depend on demand. Setting a supply limit creates scarcity because investors understand that no additional tokens will be created after a certain point. More tokens would theoretically reduce the value of their holdings in the same way that a new share issue can reduce the value of old ones, also known as equity dilution.

Shitcoins are easy to identify because they follow a specific pattern. Also, it's easy to make these on the Ethereum and Binance blockchains, it only takes about half an hour. has over 21,500 different cryptocurrencies listed, the vast majority of which are practically unusable and worthless. And even if you work in the crypto sphere or constantly follow what is happening in it, you know that in 10 years, probably close to 99% of the current cryptocurrencies will not exist and will be long forgotten.

Although there may be some interest in a given shitcoin when it is released, its price usually remains quite low. Typically, the price per unit of a similar type of cryptocurrency is in the order of 0.0000034. What follows sometimes is an exponential rise in a short period of time as investors start to join in and rely on the hype and FOMO that the price will increase manifold in a short period. This is followed by a decline caused by investors selling their coins to capitalize on quick profits. Pump and dump is often done with such coins.

Doge Price History
Doge Price History

Playing at a Different Level

You can be an investor, trader, speculator, or gambler. Each style requires its own specific approaches. If this all sounds like some kind of joke or scam or something in between, that's because shitcoins are borderline legitimate. For example, Dogecoin, which some people call an "altcoin," was known as an internet joke until new speculation surrounding Elon Musk and Dogecoin integrations on Twitter started to push its price up again. As a result, Doge now has a market cap of a staggering $13 billion.

While people have compared the thousands of shitcoins to penny stocks, which are essentially small public companies trading for less than a dollar, the difference here is that shitcoins are usually created without a real business model or purpose. And if they do, they are usually unpolished or even downright amateurish.

In the real world, if someone approaches you and says that you will become a millionaire if you give him a few hundred USD, you will most likely feel that he is deceiving you. Strangely enough, when the same idea is presented in cryptocurrency, this "fraud" magically becomes possible.

This is because beginners (new and inexperienced cryptocurrency investors) do not understand the relationship between meme coin market cap, supply, and fiat value. For example, a Shiba Inu token is worth about one-thousandth of a cent, but without looking at the market capitalization, a beginner would probably think that a small investment in Shiba Inu could make him a multi-millionaire. The only problem is that Shiba Inu's market cap is already over 5 billion and has a maximum supply of nearly 400 trillion. So the price of one SHIB, which is currently worth 0.00000817, is basically impossible from an economic point of view to reach even 0.01 cents because that would mean a Shiba Inu market capitalization of several hundred trillion dollars. The world GDP is currently 96 trillion dollars.

More catchy name = more interest

Shiba Inu Coin, launched a little over a year ago and named after the breed of dog, is a cryptocurrency that trades as $SHIB and bills itself as the "Dogecoin killer". SHIB's 24-hour trading volume is over $455 million. "SHIB" may only be a "meme coin" and have negligible value, but experts say the popularity should not be ignored as it reflects the behavior of a new, growing class of cryptocurrency traders. The hype around Shiba Inu got so spectacular that a whole ecosystem has grown around the shitcoin. Shibburn for example is a $SHIB burn tracker and one of the first dedicated burn projects in crypto. is a specialized news for … you guessed it Shiba Inu.

Shibaswap is a swap DEX exchange on which you can trade your Shiba Inu. There is even a ShibKiller shitcoin that is aiming to be the Shiba Inu killer. Its current price is $0.0000000001134.

"It's important to realize that what we're seeing is a mass movement of new and young traders moving into the crypto space." Ben Casselin, head of cryptocurrency exchange AAX, told CNBC.

If this all seems a bit ridiculous, it was designed that way from the start. The whole premise of shitcoins is to play with people's mentality and desires. Think of it as a theater where the entire internet is the stage and every social platform, messaging app and even every meme is at the disposal of the actors trying to increase the value of a certain coin so they can make money, and then that of making off with the proceeds before everyone else realizes they've been duped.

Shiba Inu Price History
Shiba Inu Price History

Why do people bother to invest

While their name may be extremely ridiculous, the truth is that quite a few people have made money due to the fact that they bought a certain coin at the right time. Of course, much more people have lost.

The world is also full of many who regret not being able to buy Bitcoin in 2010 - if you had only bought $1 worth in March of that year when the price of each Bitcoin was worth $0.003, that dollar would have got you about 333.33 bitcoins. Or close to $6,000,000 at the current rather low price of BTC.

Still, there is a certain charm to the shitcoin market. It's not just about weird and infantile names or scammers manipulating the space, but every aspect of the coins is meant to create the ultimate sense of FOMO as well as the promise of extreme wealth.

One example of this is the huge number of unused coins. While traditional cryptocurrencies operate on a supply-and-demand economic metric where there is a limit to the number of coins available in the market, shitcoins take the completely opposite approach, flooding the market with as many coins as their algorithms can create. Decide for yourself where you want to be.

The New Canine Crypto Litter

Shitcoins advertised with dog logos are being created daily, with just a few examples from recent months being names like Pomeranian, SpookyShiba, ShibaInuMother, Harambe, Dogelana, ShibGF, and others flooding the market. The goal is to resemble $SHIB and $DOGE as much as possible in order to convince as many investors as possible of the potential of the projects. Exchanges have an interest in listing absolutely any currency that could have a high trading volume because of the fees, and the creators of these cryptocurrencies own a huge percentage of the entire supply. This creates the perfect opportunity, once listed, for them to sell their holdings without much marketing or influencer efforts. Once sold, the creators of the token move on to the next project and leave their creation to die or take on a life of its own, but most often, it's the former.

Want to Keep Reading?

Want to know how you can support Crypto Fireside?

Sign up below. It's free, it's easy, and it allows you to comment and join the discussion 🔥