Why do shitcoins run away (Will shitcoins disappear)?

Why do shitcoins run away? There are many theories in the cryptocurrency community. For example, why do shitcoins run away? First, blockchain technology is immutable and transparent. Shortly after the birth of Bitcoin, a new project called Litecoin (LTC) emerged. It adopted a new consensus algorithm and achieved decentralization through code implementation. However, with the launch of Ethereum 2.0, everything seemed to change. The network effect of Ethereum 2.0 became more apparent.

Therefore, “blockchain” is hailed as the “next generation internet,” but this concept is not new. In fact, there has been little progress in the blockchain industry since the emergence of Bitcoin in 2017. The cryptocurrency market was just getting started from early 2009 to the end of 2019. The bear market in 2018 caused a significant collapse of some shitcoins. However, due to investors’ lack of confidence in shitcoins and their desire to participate, many of them chose to exit the field.

The main reason why shitcoins run away is that they do not operate as securely and stably as Bitcoin. “If we say that a project team has problems, someone will definitely take advantage of these immature products to scam money.” This behavior often occurs in extreme market environments. Many shitcoins are traded on exchanges. For example, there is a website called Btcmanager on Bitmex, which lists various shitcoins. These platforms claim that their products are indeed poor and have no interest from users.

However, most people believe that this is a scam because many people, including the founders themselves, are not aware of it. Therefore, in order to survive, some projects have to give up the token issuance process. However, some projects still cannot persist, so the developers decide to migrate the project to another chain. Although this can avoid some risks, it does not guarantee the quality of the project. In fact, there are already a large number of such tokens in the market.

Why do shitcoins run away? Many people first think of Binance CEO, Zhao Changpeng’s Weibo post: “I know you don’t know when this day will come.” Zhao Changpeng later issued a statement saying, “If you move your company overseas or elsewhere, you will find that things may be more severe than you think! Don’t think you’re a scammer!” He added, “For those who want to invest, it’s like gambling.” Another reason why shitcoins run away is that price declines usually accompany price increases, but compared to stocks, they are negligible. Because people are more willing to buy shitcoins at high prices rather than spot goods, they are caught in speculative activities.

Will shitcoins disappear?

Editor’s note: This article is from Caiyun Blockchain (ID: cybtc_com) and the author is irishash. Authorized translation from Odaily Star, Daily.

Starting from the second half of last year, the price of Bitcoin has fallen steadily to its current lowest point of about $61,000. Ethereum has also dropped to around $4,000. XRP and BCH surged more than 50% the other day, directly reaching their previous highs. The most popular in this bull market are shitcoins. If the ICO boom in 2017 represents the crazy market before the bubble burst, the “shitcoin carnival” in the first half of this year may be the same.

However, with the recent popularity of DeFi concepts, the continuous rise of mainstream assets, and the rebound of mainstream coins, the upward trend of these emerging projects remains to be seen. Of course, some believe that more and more high-quality assets will be discovered for investment and speculation in the future because there is a growing demand for potential application scenarios, such as gaming, in the current market. However, we need to pay special attention to the fact that a considerable proportion, if not more, of shitcoins in the market have experienced a significant pullback. (Image source: Coinmarketcap) According to data analysis company IntoTheBlock, in the past three months, six out of the top five cryptocurrencies are stablecoins, with USDT being the dominant one. The other stablecoins are BNB and ETH. Their recent performances have not been satisfactory and have underperformed. In addition, Ripple’s USDC token has also experienced a substantial decline recently. However, it is worth noting that many cryptocurrency exchanges have suspended their operations due to enhanced regulation by the U.S. Office of Foreign Assets Control (OFAC), the European Securities and Markets Authority (ESMA), and other regulatory agencies. Other mainstream cryptocurrencies, except for EOS and Tron, have also shown significant declines.

Although many investors focus on the price trend of Bitcoin, there has been no case in the past few months where any coin follows the market fluctuations. For example, Bitcoin has been in a horizontal shock in recent weeks. After breaking through $46,000 on Monday evening, it has been adjusting until earlier today when it returned to that position. This situation is not surprising for those who are optimistic about Ethereum in the long term, as Ethereum 2.0 is expected to be launched in early September and enter the genesis block stage. During the three quarters before August, Bitcoin had reached a new all-time high above $29,000 five times. From late October to mid-November, Bitcoin experienced two major retracements.

In conclusion, it is a good thing that shitcoins’ overall trend is affected by various factors. However, caution should be exercised when dealing with the collapse of shitcoins or sudden drops in other types of coins, especially during bear markets.