• Tuesday, July 16, 2024
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BusinessDay

Nigerians suffer losses as shitcoins fail to rise

Nigerians suffer losses as shitcoins fail to rise

Jude Okechukwu, a cryptocurrency enthusiast and trader, invested in a variety of shitcoins, including husky token, whale token, pinkmoon, safewolf and moonery.

“We follow the trend and keep staking in money hoping that it will be profitable and we will reap; however, I lost all the money I invested in all these coins, and most of them are not in existence anymore. When I started, I invested five dollars on each of these coins and lost everything,” he said.

BusinessDay findings show that every aspect of shitcoins is meant to create the fear of missing out with a promise of extreme wealth. While traditional cryptocurrencies operate on a supply-and-demand metric of economics, where there is a limit to the number of available coins in the marketplace, shitcoins flood the market with as many coins as their algorithms can create.

Okechukwu said: “Shitcoins are projects that can give you excess yields or profits; they multiply faster than main coins and fetch more money than the solid coins available in the market. As such, people believe they can use it to raise funds quickly, hence the high rate of rug.

“When these coins launch, they intentionally fix some code into the units which would enable you to buy some tokens; however, you would not be able to sell. This is one of the characteristics of shitcoins. Immediately you buy, you may find it difficult to sell.”

For shitcoins, the more attention-grabbing a coin’s name is, the more people will hear about it.

Experts say it is important and easy to understand the draw, particularly when it is fed by meme lords on social media platforms including Reddit, Twitter, YouTube, Facebook, Instagram, and Telegram, promising that this is the next big opportunity in crypto.

Read also: Binance adopts user-first approach to enhance crypto security

“When the safewolf cash coin was trending everywhere you turn to on all social media platforms, I decided to give it a try and I invested in naira in my trust wallet. I risked N30,000 expecting a very huge profit within a period of time, but to my surprise, I saw it drop to N2,000 few days later, and I had to let go of that particular investment,” Kazeem Jimoh, a crypto trader said.

While some of these shitcoins fade out, others have given their traders opportunities to make profits on them. Sulaimon Kareem, a cryptocurrency enthusiast who bought Luna at 0.21 in June 2020, purchased 15,000 units at over $3,000.

“I staked my Luna for a year to earn additional rewards which I claimed weekly. After a year of staking, my Luna value pumped to over $20,000, and I gained seven times my investment,” he said.

In March 2022, Luna hit $88 per value. It reached $115 the following month.

“This seemed like a poverty quencher as I added more Luna to my portfolio. At that time I was holding about $30,000 Luna value in my wallet since it’s going to be a life-changer coin. However, a month later, Luna’s price fell drastically and was replaced,” Kareem said.

Although the crypto market is bearish currently, crypto traders say it dumps and pumps once it hits an all-time high season. The comeback of the coins invested in by these individuals was predicted to avoid losses, as the stable coin versions were also tried by the market.

“The Luna coin dropped to the extent where the stable coin version also dropped to 0.5 in June from a market capitalisation of over $18 billion, which has never happened before. We kept predicting whether it’s going to pump back or not. Then Luna introduced v2.0, and we all thought that would be a bodybuilder for us until that liquidated too,” Kareem said.

While some traders are optimistic about several of these coins pumping back, others have given up hope and are taking a break. Tope Akomolafe, who has been investing in shitcoins since 2021, has had good records until just recently when he invested $10, 000 in Baby shark coin and lost all his money.

After this incident, he believes that if the pump of these coins would come, it would come in the form of fresh coins, and not to retrieve his and every other traders’ loss.