From the dream of getting rich overnight to the leek field: the truth about Meme coins and Shitcoins

Preface

The crypto market is rife with a “get-rich-quick” myth — although Bitcoin (BTC) and Ethereum (ETH) are relatively stable, it seems increasingly difficult to double your investment with them. As a result, a group of investors has turned their attention to more exciting targets: Meme coins fueled by social media hype, and meme tokens that cause a sensation immediately after launching on decentralized exchanges. These two categories of coins have become the most talked-about and riskiest assets in the market.

Meme Coin Wave: From Joke to Belief

What is a Meme Coin? Simply put, it’s a tradable asset born from internet culture. These coins lack real technological innovation or commercial applications; they survive purely on internet memes, social media buzz, and endorsements from influencers.

The most典ical example is Dogecoin (DOGE). It was launched in 2013 as a joke, inspired by the Shiba Inu meme (Doge meme), and was not taken seriously. But around 2021, under repeated tweets from celebrities like Elon Musk, this joke coin was driven up to a market cap of $21.66 billion. Currently, DOGE trades around $0.13, illustrating just how absurd its price has become.

Shiba Inu (SHIB) has an even more interesting story — it openly positions itself as the “Dogecoin killer” but has no intention of real innovation. Relying on low price, high leverage, and community buzz, SHIB attracted countless retail investors in 2021, with a market cap once surpassing $4.61 billion.

Another newcomer based on internet culture is Pepe Coin (PEPE), with a circulating market cap reaching $1.68 billion. Behind these figures lie the speculative dreams of many investors.

The Meme Token Frenzy: A Gambler’s Playground

What truly drives retail investors crazy is not these well-known Meme coins, but a more aggressive phenomenon — Shitcoins.

What are Shitcoins? They are typically found on decentralized exchanges like Uniswap or PancakeSwap. When they first launch, they are often unknown, with market caps only a few thousand dollars or less. Their appeal lies in extreme speculation: buying for just a fraction of a cent, then selling at a dollar, earning 100x profits. This temptation attracts many gamblers.

Why are Shitcoins so crazy? Because they possess several unique attributes:

• Extremely small market cap: Limited liquidity pools mean small amounts of capital can cause significant price swings.
• Unclear team background: Often developed by anonymous creators, making traceability difficult.
• Opaque tokenomics: Nobody knows how much initial holders own or when they might dump.
• Wild price fluctuations: Prices can skyrocket hundreds of times in short periods, then crash to zero.

The Illusion and Reality of “Chasing Shitcoins”

“Chasing Shitcoins” has become a popular term in recent crypto circles, referring to investors rapidly searching for and buying these low-market-cap new tokens. The underlying logic is simple: enter before the price skyrockets, then exit when retail investors are left holding the bag.

But the truth is, most profits go to project teams and early whales, while latecomers often end up as bagholders. Here are some common schemes in Shitcoin investing:

1. Pump-and-Dump Scheme

Project teams accumulate大量 tokens early on, then use small trades and social media hype to inflate the price. Once retail investors are attracted in droves, the team dumps大量 tokens at high prices, pocketing millions. Remaining investors face a sharp price decline and suffer heavy losses.

2. Liquidity Black Hole

Shitcoins have limited liquidity. When new investors buy in, the price rises; but when they try to sell, they find no buyers and get stuck at high levels. Addresses holding大量 tokens can easily manipulate the entire market.

3. Project Developers Run Away

Many Shitcoins’ smart contracts have backdoors that allow developers to freeze, destroy, or transfer funds at will. Investors suddenly find their tokens locked or wiped out.

The Probability of Getting Rich and the Real Risks

The allure of Meme coins and Shitcoins is the illusion of “possible doubling.” For example, Dogecoin did see some early investors become wealthy during the 2021 bull market. But such success stories are often the exception rather than the rule.

Risks include:

• Highly speculative: Prices are driven by social media sentiment; a single bad news can trigger a mass sell-off.
• Liquidity traps: Due to limited liquidity, large sell orders can cause over 90% price drops.
• Regulatory uncertainty: These tokens lack transparency and may be delisted or cracked down upon at any time.
• Technical risks: Smart contracts may contain vulnerabilities, risking loss of funds through hacks.
• Psychological traps: Seeing others profit prompts reckless entry; watching losses might lead to increased investments, deepening losses.

How Should Rational Investors Approach?

Instead of blindly chasing trends, it’s better to adopt a scientific investment approach:

Step 1: Define your risk tolerance

Shitcoin investments should be made with disposable funds, capable of absorbing 100% losses. Limit exposure to no more than 5% of your total assets, ideally under 1%.

Step 2: Conduct fundamental research

Review whitepapers, token distribution, and team backgrounds. If such information is unavailable, skip the project. Check circulating supply, lock-up periods, and initial holder addresses to assess dumping risks.

Step 3: Monitor community and market sentiment

Tokens with high social media buzz are often in the bagholder phase; opportunities emerge when interest wanes. Think backwards: Why are people promoting a certain coin so aggressively? Do they already hold large amounts?

Step 4: Enforce disciplined stop-loss

If losses reach a preset percentage (e.g., 20-30%), exit immediately. Avoid the temptation of “it will rebound.”

Step 5: Diversify investments

Shitcoins should only constitute a small part of your portfolio. Main assets should be in mainstream cryptocurrencies like Bitcoin and Ethereum. Bitcoin’s current price is around $85,730, ETH is about $2,940. While their growth may be less aggressive than Shitcoins, their stability and liquidity are in a different league.

Conclusion

The Meme coin and Shitcoin phenomena reflect an eternal truth in the crypto market: High returns come with high risks. Dogecoin’s rise from 1 cent to 1 dollar is real, but many investors have seen their holdings drop from 10 dollars to less than a penny.

Rather than pinning hopes on the next “get-rich-quick” opportunity, acknowledge reality: the secret to market profits is not luck, but knowledge, discipline, and mindset. Those who succeed in crypto are often not the most aggressive, but the most rational.

Maintaining respect for risk is the key to surviving longer and earning more steadily in the crypto world.