To the moon ... or graveyard?

8 Min Read
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Do I have to mention more to know that this is about the so-called “Hypecoins”? And now that we have already come to the conclusion that we are talking about this type of coin here, then the next question. Are these coins worth investing in?

Price influencing

As everyone here knows, very simply explained, a price is determined by supply and demand. If there is more demand than supply, the price will go up. If there is more supply than demand, the price will go down. Very simple and this really doesn't require a higher mathematical calculation. It is also that simple in the case of the typical “Hypecoins”. With coins that have a whole vision and roadmap behind it, I don't want to claim that this is everything, but in the case of a Hypecoin, yes ... there it is really that simple.

Because most of these coins have no vision, and certainly no roadmap. They have no use case. Almost all hypecoins are just a digital currency. This means that it is something that simply only retains a value. You can compare it with the euro (€), dollar ($) or yen (¥), but digitally. A big difference, however, is that these currencies are fairly stable, unlike hypecoins. Only when you talk about Hypecoins, you don't use the word "STABLE". These coins are anything but stable. You can almost say that these coins are even more volatile than crypto in general already is.

Now I may have to start excluding DOGECOIN from the “Hypecoins” without any usecase at all because things seem to be going on behind the scenes of Doge anyway. A team of crypto developers seems to be working together with Elon Musk on various problems of DOGE. Including, for example, the unlimited supply. Is this really so? I don't know, I haven't done a deep dive to it either, so I won't comment on that. But what I do know is that DOGE was definitely hyped up by Elon Musk, and many people made a lot of money with it, but just as many people burned their fingers on it when they bought DOGE at 0.72 cents expecting that DOGE was about to hit the $1 barrier. Whether there is a real future for DOGE? It remains to be seen, but if these developments continue, DOGECOIN's high market cap may well be justified, and will grow much further in the future. According to many people, DOGECOIN is an interesting investment. And that's great for a crypto to turn from a parody of Bitcoin to a serious investment opportunity.

By the way, did you know what DOGE stands for? The logo may be of a Shiba Inu dog. DOGE does not stand for a dog at all as I have always thought, it stands for Do Only Good Every day. Don't ask me why the last D has been omitted… I don't know!

Digital currencies that don´t represent anything

However, this change is not possible for most hypecoins that have recently gone 'To the moon'. Most have no vision, no roadmap and certainly no innovative technology behind them and are therefore simply digital currencies that do not represent much or nothing. Although I did see something yesterday on Twitter about SAFEMOON having landed in The Gambia to start their mission there. For now, though, this doesn't seem to change the price much. What the future will bring here is coffee grounds watching.

Why are these coins so special?

What makes these coins so special is not the technology behind it, as is the case with, for example, a Polkado and Kusama. Solana is also such a luminary in terms of technology. But these hypecoins don't have that. So what makes such a coin suddenly launchable like a rocket? It has nothing to do with Elon Musk's Space-X, that much is certain. But it has everything to do with the fact that these coins are community-driven.

Community driven

SafeMoon is built on its community. The team behind the coin focuses more on their supporters than on what the coin actually contains. Once the start was made and some form of brand awareness had developed, the coin entered the next phase. The coin was picked up on online platforms such as TikTok and Reddit. There was then a snowball effect, with the promotion for the coin getting bigger and bigger.

The coin was promoted as a coin similar to Bitcoin, but now you can be with it from the get-go. To many people this sounded like music to their ears and they invested in it. Now that they owned the coin themselves, they naturally wanted to see a price increase. What happened now is that the new owners also started promoting the coin, further extending the snowball effect. This resulted in a constant price increase totaling thousands of percent. But then the moment came when people thought it was too crazy for words. This caused a huge sell-off, causing the coin to take a huge blow.

Smart ass move

And then we have Shiba Inu. The anonymous creator of Shiba Inu has employed a very clever tactic. The coin was founded in August 2020, but had its greatest success in May of the year 2021. The coin is seen as 'the successor to DOGE' and is now the 27th largest coin on earth after a huge price increase.
The reason that the coin has become so huge in the month of May (of the year 2021) is because of a clever trick of the anonymous maker. He donated a total of $6.7 billion worth of Shiba Inu to Vitalik Buterin's wallet. Vitalik is the co-founder of the globally acclaimed Ethereum. He is seen as a true crypto expert and many fanatics follow him closely.

When Vitalik Buterin's many followers found out that Vitalik Buterin had $6.7 billion worth of Shiba Inu stored in his wallet, their interest in this coin became enormous in no time. This spread very quickly across the internet, especially on the aforementioned platforms TikTok and Reddit. As a result, a huge amount of people invested in this coin within a very short time. This resulted in a significant increase in demand, which in turn resulted in a formidable price increase.

And now that Vitalik Buterin has liquidated about 90% of the Shiba Inu, the supply has also been reduced considerably.

What can be learned from this?

You can mainly see Hypecoins as an instrument for people who want to earn a lot of money within a short time. This can be done in various ways.
An example of a group of people who earn a lot of money from these hypecoins are the founders. They set up the coin and keep, for example, 40% of the coins in circulation. They then attempt to create demand for the currency, causing the price to rise. When the price has risen, they sell their coins and in this way they have made a colossal sum of money in a short time.

Another thing we often see in the world of hypecoins is the pump and dump. Pump and dump is a form of price influencing. An enormous amount of coins is then bought by a group of people, or one person who has a large wealth. They then hype this coin, and then cash out after a significant price increase.
The latter way is the way that the most money is made in the hypecoin industry, and it is actually what this whole market is all about.
Are hypecoins a good investment?

But now that we know this, can it be said that hypecoins are a good investment? It depends on how you look at it and for what purpose you jump into a hypecoin.

Now you know… I'M NOT A FINANCIAL ADVISER, so this is NOT financial advice and always do your own research!

  • Can a lot of money be made in hypecoins?
    Yes, this is absolutely possible!

  • Is it a safe investment?
    Well uhmm no, not really!

But ... HOW?

How is it possible that hypecoins are not a good investment while some coins go up so much in such a short time? That depends on several things, for example how you view the crypto market. Do you invest in crypto for the long term, or are you a trader who wants to make a lot of profit in a short time? If you have a long-term view, in most cases it is better to stay away from these hypecoins. As mentioned before, there is often not really a project or a plan behind it and because of this the coins will probably not have a long life. If you are looking for a lot of profit in a short time, hypecoins can be interesting.

However, as with most assets in which a lot of money can be made in a short time, as fast as it can go up in price, it can also go down in price. A Bitcoin, or an Ethereum will never go to $0, because there is actually a technology behind it that people believe in. This is different for the hypecoins.

Many will go as fast as they have come and many new hypecoins will hit the market every day.

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