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Shitcoin is a slang term that describes a coin that has lost all of its value. Any cryptocurrency can become a shitcoin due to a variety of circumstances.
This includes scenarios in which interest in the cryptocurrency never caught on in a meaningful way, or due to the value of a crypto being based solely on speculation, or if a coin was created as a tool for ill-gotten gains in the first place.
Of note, most shitcoins are usually not always worthless. Rather, the lifecycle of a shitcoin usually begins with some interest in the coin and its network.
There is often a period after the coin’s loss when its value remains relatively level. Subsequently, by speculative hype or by pump-and-dump scheme, the coin’s value skyrockets.
Finally, the coin’s value drops suddenly and significantly, never to recover. This is almost always the prototypical lifecycle of a shitcoin.
Growing Pool of Shitcoins
There is no set price level or market capitalization that defines when a coin has officially become a shitcoin.
The past decade has seen the proliferation of different cryptos, each with varying levels of success.
While many crypto pundits point to the most successful of these, i.e. Bitcoin, Ethereum, etc., there have been hundreds of altcoins launched whose market cap falls under $200.
Given the unregulated nature of cryptocurrencies, it is normal for such a lifecycle to exist within any market as speculation takes hold.
Looking ahead, it is unlikely that this trend will abate, as many existing cryptos will almost certainly die out eventually for several reasons.