Ever heard of shitcoins? What are they, and how can they bring huge losses to your portfolio? There are several questions associated with the shitcoins. Let’s unfold them slowly.
Since the blockchain emerged, plenty of new coins and tokens have been popping up every day. However, not all of them are worth to invest. Many turn out to be just shitcoins or meme coins. Such coins have no big volume. Not many people hold or trade them. Most importantly, the shitcoins have no actual utility. They skyrocket at once, and they dip the next moment and never return to normal levels.
The article will discuss the top five coins you should not keep in your portfolio as they might risk a huge loss.
How to identify the shitcoins?
Before we dive into discussing the shitcoins to avoid, let’s list down some indicators to recognize the shitcoins and avoid buying or holding them:
- Whitepapers or websites look similar to others.
- Liquidity seems limited.
- There is the functionality of the coin.
- The developers have no renowned profile.
Top 5 shitcoins to avoid
Let’s discuss the top coins to avoid.
- Safemoon (SFM)
- BabyDoge coin (BABYDOGE)
- Holochain (HOT)
- Floki Inu (FLOKI)
- Synthetix token (SNX)
The Safemoon is a decentralized token launched on Mar 08, 2021. Although the token is a shitcoin, the asset was boosted and ranked among the top 250 tokens due to Elon Musk’s tweets. Moreover, the market cap for the token has hit the $1 billion mark. However, it is not very attractive to buy and hold.
It was developed on the Binance Smart Chain platform.
The platform has three main functions:
- Acquiring liquidity
Though celebrities like Logan Paul have to show interest in the token, the popularity of the crypto is diminishing. As a result, Safemoon is looking to launch its NFT marketplace and a coin launching pad that will allow users to create their cryptos. However, the low liquidity remains a significant concern that makes it a hazardous investment.
BabyDoge coin (BABYDOGE)
As the name says, BabyDoge is a clone of Dogecoin. The coin is considered a progeny of Dogecoin. Since Dogecoin saw a huge gain amid support from Elon Musk, several other cryptos got inspired and named after it.
BabyDoge coin was launched in June 2021, and right after two weeks of launching, the coin rose by 1000%. However, the price rise is only attributed to the tweets of Elon Musk, as the price saw a surge of 228% only 24 hours after the tweet.
Although it is a meme coin, the transaction speed of BabyDoge is faster than the original Dogecoin. However, the low liquidity makes it the least attractive and is not worth to invest.
The Holochain is popularly known as the HOT token. It is a hosting platform for hApps. It is a decentralized platform which is used to develop the applications. The platform is suitable as it does not have any scalability issues.
You may host the hApps on your machine (PC) and, in return, earn the HOT tokens. You do not need the APIs as the Holohain language is compatible, and it provides you with access to several other online apps.
Holochain has several uses like application server distribution, the flow of technology, etc. Even it is used to generate improved blockchain networks with every bit of information being encrypted. The best thing about Holochain is the ability to customize the experience as per the parameters of the users. Other than that, the HOT tokens are used for international funds transfers on different e-commerce platforms.
Although the HOT token and Holochain are growing and have multiple utilities, the token cannot gain traction with investors. Hence, the price remains quite low and does not show any promising gain over the period.
Floki Inu (FLOKI)
Next on the list is the Floki coin. The name was derived from the dog of Elon Musk. The coin ranks among the top 3000 coins in the entire market. It came into existence after the Shiba Inu. However, the shitcoin managed to gain some profit in a short period. Elon’s puppy was featured in his tweet, which resulted in a tremendous gain.
As the meme coins fluctuated wildly, the Floki could not last longer and shed off all the gains. As a result, the currency remains confined to its lower end of the range.
However, the shitcoin is slightly different from others as it is associated with various projects. For example, the coin has partnered with Garden Movements to resolve the problem of food insecurity. The brother of Elon Musk operates Garden Movements.
Floki has several upcoming projects. However, the coin has not been able to gather the attraction of investors, and it remains a risky asset, not worth investing in.
Synthetix token (SNX)
Synthetix is a platform that allows people to sign up and mint the crypto assets. It provides exposure to real assets like stocks and commodities as well. The platform also provides collateral against the issued SNX tokens.
You can buy the SNX tokens that get frozen in a peculiar contract. It allows you to collateralize your holdings on Synthetix.
The token has several utilities like staking SNX token. Hence the users may have exposure profit and loss in certain markets. Despite the utilities and better pricing, the token remains an unhealthy investment as the price has reduced three times from its highs within less than a year. Hence, it is better to avoid holding SNX tokens.
So, now you know what shitcoins are, how they work, and how they can turn your profits into losses. You may conduct your research and determine which one of the shitcoins works and which does not. It is prudent to explore every aspect of the token or coin before investing. The price history, utility, and liquidity are a few elements to analyze.