Shitcoin Investing NZ – New Zealand’s Ultimate Guide (2021)

What is a Shitcoin?

As ‘shitcoin’ is a rather colloquial term, it is not exactly something you’ll be able to define simply by opening a dictionary. For the sakes of ease and consistency, we’ve created our own definition for this guide:

“A shitcoin is any cryptocurrency whose characteristics are expected to attract short term investors and those looking to make instant gains. Key characteristics include the coin being meme-based, have an absurd name, or have a community behind it mostly consisting of those wanting to pump and dump or boost coin prices”.

What is Shitcoin Investing?

Shitcoin investing is the practice of buying shitcoins and holding or trading them in hopes of their prices skyrocketing. Because many shitcoin investors seek newly or recently launched projects, it’s possible to buy large amounts of coins early and ride the initial adoption phase whilst other investors jump on board. An example of this is when we purchased $CumRocket at 0.2c in its first weeks of launch, and rode it to 25c while others jumped onboard.

Common Terminology

Shill – someone who relentlessly promotes a specific cryptocurrency with the intention of increasing the price. These statements are usually baseless or speculatory and are commonly found to be misinforming.

Rug pull – a purposeful action whereby the developers of a shitcoin/cryptocurrency intentionally abandon a project taking all funds invested with them. They are generally more commonly seen on decentralised exchanges such as PancakeSwap, UniSwap, SushiSwap

Moonshot – much like the name suggest refers to coins that have the potential to make meteoric gains or go to the moon.

Lambo – a slang term used in cryptocurrency communities referring to the car that someone will buy when their crypto assets rise significantly.

Punter – refers to a trader who enters the market intending to turn a quick profit. Can be referred to as a speculator in other investor market circles.

ATH – All time high, refers to the highest price or highest market cap that a coin has reached in its history.

ERC-20 – in simple terms is the technical standard that tokens on the Ethereum network are required to adhere to. It contains a list of conventions that defines interactions between tokens such as addresses, how transactions are approved and the number of tokens there are. In simple terms; a token on the Ethereum blockchain.

BEP-20 – is the token standard used for the Binance Smart Chain, and intends to build on ERC-20 which compliments the Ethereum network as its conventional token specification.

Bull Market – is a period where the crypto market is characterised by an overwhelming upward trend. During this period, investors are increasingly confident of the market direction and trading conditions are more optimistic.

Bogdanoff Brothers – A meme that has circulated throughout the crypto community that is based on the Bogdanov twins. Well known for their unconventional appearance, they have featured in countless viral videos. Most notably, however, are these two classics – He bought & He sold.

Bear Trap – A coordinated effort by a group of traders to purposefully manipulate the price of a specific cryptocurrency.

Bull Trap – This can be observed when a coin breaks above a certain resistance point, prompting holders to purchase more in the hope of further gains. The resulting decline in said coin essentially traps investors who purchased on the breakout signal, effectively trapping them in their position for the long term.

Dead Coin – a label that can be given to coins for a number of reasons such as hacks, rug pulls, low liquidity, or lack of development.

Fiat Onramp – A platform or exchange which allows the user to convert their fiat currency (government-issued money) into cryptocurrency. See our guide on how to buy cryptocurrency with NZD in New Zealand.

Network Fees – Anytime you send cryptocurrency, there is a network or transaction fee that is incurred. The fees vary among coins and in some cases a secondary ‘gas’ token is required to make transactions. This is to either reward the miner (for proof of work coins eg. Bitcoin) or in the case of coins like ADA who use a proof of stake system, it is to reward the validator when they get chosen to forge the next block.

HODL – Can be interpreted as ‘Hold on for dear life’, originated in 2013 when a forum user ‘GameKyuubi’ made a coincidental typo on stating in a post about Bitcoin “I AM HODLING”.

Moon Bag – the remaining portion (5-10%) of your shit coin investment that you leave invested in the hopes that the coin takes off again in the future and ‘moons’.

Different Shitcoin Networks

Ethereum Network & ETH

Ethereum much like other cryptocurrency networks is an open-source, decentralised blockchain that is equipped for smart contracts. The native token for the Ethereum network is Ether or ETH. Much like other networks, it supports the creation of tokens on its network and this among other reasons has led to it being the most actively used blockchain.

ERC-20 in simple terms is the technical standard that tokens on the network are required to adhere to. To expand on that, it is the conventions and rules that have been established as a qualifying criterion for token implementation on the Ethereum blockchain.

Binance Network & BNB

Binance Coin (BNB) is a coin that was launched in June & July of 2017, shortly before the Binance exchange opened. It was released on the Ethereum network as ERC-20 BNB initially. Following on from the initial release of ERC-20 BNB on the Ethereum network, the BNB coin was later swapped to the standalone Binance network using BEP-2 as the technical standard with the swapping ratio of 1:1.

BEP-2 much like ERC-20 is also a technical standard that tokens require to run on the Binance network. BEP-2 BNB forms the basis of the Binance chain as its native token, and its primary function is to be used for fees or gas. This means when exchanging BEP-2 tokens a small amount of BNB coin will be required to make the transaction.

Binance Smart Chain (BSC)

The Binance Smart Chain is most simply described as a blockchain that is running parallel to the Binance blockchain, with the core difference of the two being that BSC supports smart contracts. Smart Chain is also compatible with the Ethereum Virtual Machine (EVM) which has added a significant amount of utility to the Binance ecosystem. One of the goals of the Smart Chain development was that it was intended to provide an extension to the capabilities of Binance in the form of Smart Contracts without impacting the Binance Chains ability to process transactions. The lower transactions fees that the network requires also make it a much more favourable network for hosting shit coins.

Identifying a new potential shitcoin investment

If you are hoping to strike it big on a moonshot coin, then it is best to follow these six simple rules as a basis to ensure you’re not falling victim to an inventive scammer. The key thing to bear in mind is that regardless of how closely these rules are followed, you may still lose your initial investment. So most importantly, only invest what you are willing to lose. If you are constantly worried about your positions or can’t sleep at night as a result of your investments, then this probably isn’t for you.

Rules to remember:

  1. Binance Smart Chain (BSC) is the ideal network for moonshot shit coin trading, for a number of reasons. The fees are incredibly low for transactions usually only $0.50 at the most, so it makes regular day trading a viable option. Also, the transaction times are very quick due to the network being optimised for high-frequency trading.
  2. Ethereum network coins (ERC-20) such as Kishu Inu (KISHU) have the disadvantage presently of attracting Ethereum network fees which makes buying smaller quantities much less profitable. This is expected to change as a result of the implementation of ETH 2.0
  3. When learning the ropes, it is important to start off with small amounts (think ~$20) as if you begin investing heavily in volatile tokens losses can accumulate quickly

There are a number of sites that will be most helpful for researching recently listed or largely unknown tokens, these vary on the network that the token is listed on but I will leave a list below:

Blockchain Explorers

These are websites that allow an insight into the events happening on the blockchain for each coin. A simple way of regarding them is they act as the search engines for the blockchain network. For the two networks I referenced earlier, Ethereum and Binance Smart Chain the following websites should be considered trusted sources of information:

Etherscan.io is the Ethereum block explorer and allows anyone to search a token by name or address as well as individual transactions by ID.

BSCScan.com is the Binance Smart Chain block explorer and allows anyone to search a token by name or address as well as individual transactions by ID

Holders

First, go onto the blockchain explorer for either of the two networks your shitcoin operates on (EtherScan or BSCScan). Next search your specific coin you’ll be shown the ‘Overview’ section which holds a few key fields of information about the shitcoin. ‘Holders’ are very important for ascertaining how likely your coin is going to be successful/survive. One of the highest-ranking holders should always be the liquidity pool for example ‘PancakeSwap: COINNAME’ and also the burnt or dead coin address which will resemble an address similar to “0x0000000000000000000000000000000000000001”. This is to reduce the likelihood of the creators performing a rug pull plunging the value to almost nothing.

Liquidity pool

Liquidity pool is likely the most important, put simply they are a pool of tokens that are secured in a smart contract. They are useful for facilitating transactions by providing liquidity on the exchanges used to trade shitcoins (PancakeSwap, Uniswap, SushiSwap). A rule of thumb to follow is to not invest if the value of the liquidity pool is lower than $30,000. The reason for this is because a scammer is unlikely to provide a liquidity pool that large if it is a simple rug pull. A coin with a locked liquidity pool is key for its growth also. Additionally, you’ll want to ensure that it’s locked for a sizeable period of time, for example at least 3 months.

A good way to check the liquidity of a shit coin is to go to poocoin.app and paste the contract ID into the search bar. On the next page, it will have a section on the left side of the page that will say “SHITCOIN/BNB LP BNB Holdings:”. Here is where you’ll be able to see the liquidity pool, which as stated earlier should be more than $30,000.

Volume/transactions

‘Transfers’ are also important as they indicate the frequency and amounts that people are trading the specific shit coin. If the coin has less than 100 holders and there is no activity, then it is best to disregard the coin and move on. It could take off later on, so you could bookmark the URL and revisit it in a day or 2 but unless there are 5+ transactions a minute then it’s likely dead.

Marketing – website/twitter

If the team has not bothered to create a website or Twitter, then it is likely a scam and you should abort immediately. If the shit coin does have a website, but it is of low quality and doesn’t have any original content then it is also likely not going to go anywhere. The website is quite crucial in the early stages as most people will base a large amount of their confidence on the marketing.

Coin Name & design

A coin which has a novel name ‘eg. Cumrocket or FuckElon’ is far more likely to catch on and substantially increase in price due to its meme value. A shit coin that may start as a joke can bring unprecedented gains, so these types of coins can be a good bet if only for a short period. Much like the website, the logo design is very crucial for attracting early investors. If there has been no effort made into the shitcoins logo design then while it isn’t the most important factor, it should be a red flag.

The team

Can you find any mention of the team or people involved on the shit coins social media or marketing? If yes then this is a very good sign that the coin is legitimate. The reason being, if someone is willing to publicly identify themselves as being associated with a shit coin then pulling off a scam becomes a lot more difficult.

Different exchanges for shit coins

UniSwap

Uniswap, much like PancakeSwap is a decentralised exchange for trading tokens/shitcoins, but instead operates on the Ethereum network. It marked the widespread use of a unique version of the automated market maker model (AMM), called constant product market maker. Whereby the automated exchange of crypto takes place whilst the total liquidity of the pool remains constant. This is a significant simplification on an incredibly broad topic, however, more can be found by clicking this link.

PancakeSwap

PancakeSwap is the most commonly used decentralised exchange for trading shit coins on the Binance Smart Chain (BEP-20 tokens). As was explained in an earlier part of this guide, rather than a list of orders that are matched with somebody else, PancakeSwap relies on a liquidity pool to trade against. These are filled with many other holders funds and facilitate the decentralised trading of these tokens. Once tokens are deposited into the pool, suppliers of funds receive liquidity provider (LP) tokens in return for their contribution. The model it follows is very similar to UniSwap & also SushiSwap but there are many other prospects for earning rewards on the platform as well.

SushiSwap

Similarly to UniSwap, SushiSwap follows the automated market maker model (AMM) and relies on liquidity providers committing funds into the liquidity pool. This liquidity forms the foundation for the transactions that users undertake on the platform, with the liquidity providers receiving the platforms native ‘SUSHI’ token in return for their contributions. A portion of the trading fees that are collected on the site is dedicated to ‘SUSHI’ tokens which are used to remunerate the liquidity providers.

Finishing points

Some final tips for beginners and also more experienced shit coin traders

  1. Tread with caution, invest too heavily in the beginning and you risk getting wrecked and losing all your investment to scams. Ensure you have a sizable portion of your portfolio in more predictable investments such as ETH & BTC. You’re pretty much guaranteed to do well with those, whilst shit coins contain a lot of unknowns.
  2. 95% of shit coins are scams. If you don’t sell at the right time, you’ll lose everything. Trust me, it’s harder to sell than you think when you’re watching the chart on a moon trajectory… then bam. Literally seconds and the market cap can drop by millions.
  3. Half of the remaining 5% are likely legit but are subject to extreme manipulation by whales or groups of pump and dumps. Once again, you’ll lose most of your money and it’s hard to rebuild that progress once a chart has been wrecked by a whale.
  4. Always have your exit strategy planned, and even make a test transaction in anticipation of when you want to liquidate your holdings. You never know what may happen when you inevitably are frantically trying to sell, as making a mistake in the heat of the moment can cost you dearly.
  5. A few coins are fully legit. Why?
  • They have a use case.
  • Transparent and Doxxed team.
  • Locked Liquidity.
  • A strong community that watch for whale action.
  • Strong whitepaper and marketing plan.
  1. Do your due diligence. Research the coin. Analyze BSCscan/other block explorers and understand the holders and risk.
  2. Biggest tip of all. TAKE GAINS ON THE WAY UP. As soon as you 2x your initial investment- take half out. From then on it’s house money and not your own worth.

Please note: This is not financial advice and these are simply lessons learnt along my own shit coin journey, where I have both struck success but also have lost significantly.

How to buy Shitcoins in NZ (2021)

Buying Binance Smart Chain (BSC) coins on decentralised exchanges through TrustWallet

Below is a guide to purchasing BNB Smart Chain coins (shit coins) through one of the most popular decentralised exchanges – that being PancakeSwap. As explained earlier Binance Smart Chain is a blockchain that runs parallel to the BNB chain so if you already own BNB then you will need to first convert it into BSC.

Receiving BNB into your TrustWallet

Before you can exchange your BNB Smart Chain for shitcoins, you will firstly need to purchase or send BNB into your TrustWallet by pressing the ‘Receive’ button pictured below. This will bring you into the screen shown below where there is an option to copy the address, which you will then use to direct your BNB to the correct address from your other wallet or exchange. From here you will need to paste this into whichever wallet or exchange you are transferring from.

Please note: For a more detailed guide on how to buy crypto, visit our guide on how to buy cryptocurrency in NZ.

Converting Binance Coin (BNB) to Binance Smart Chain (BSC)

Put simply, Binance Smart Chain (BSC) is a new platform developed by Binance that runs parallel to the Binance chain. The primary aim of the Binance Smartchain is to provide lower costs of making transactions and also to provide a better environment for DApps (decentralised applications and other decentralised products related to DeFi).

Converting BNB into BSC is simple, and takes only a few easy steps. Firstly, you’ll want to select BNB in the ‘Wallet’ tab on TrustWallet. You’ll be shown a screen similar to the one below. From here you’ll want to press the ‘More’ button which is circled in red.

This will bring up the menu pictured in the photo above, which will show the menu option ‘Swap to Smart Chain’. You’ll want to press this and it will take you into the next menu where you will be able to specify how much BNB you would like to swap to Smart Chain.

Here you will see the balance of both coins and you can choose how much you are wanting to convert. Please note: Do not convert 100% of your BNB as you will need to allow for the transaction fees.

After you have pressed swap, you will now have BSC and you can proceed to buy shitcoins from a decentralised exchange (DEX).

Buying shitcoins on TrustWallet using PancakeSwap

Firstly, you’ll want to open TrustWallet and ensure you have DApp browsing enabled. This can be done through this link first. Once you have done that, you will notice that the browser tab is now located at the bottom. Click into this and you will be shown a screen similar to the one below.

For this guide we’ll be using PancakeSwap, so please select it and you’ll see the screen below:

Once you’re on PancakeSwap, you’ll see in top left that we are currently on the Ethereum network. As most new shitcoins are on the BEP20 (Binance Smart Chain) network, we will need to change it to the correct network.

Now that we are on the correct network, we are able to swap our BNB for our shitcoins.

As most shitcoins are relatively new or are not listed on PancakeSwap natively, you will need to find the contract address and pasting it in. This can be done by firstly finding the coin on poocoin.app, and then copying the contract address from there. I will use Cumrocket as an example.

Once you’re on the coin page, if you press the red circle button then it will reveal the contract address. From here you can copy and paste it into TrustWallet as shown below.

The reason why we go to poocoin.app and all this effort is to ensure we purchasing the correct coin and not an anonymous contract address sent or given to us. Also, as a side note do not ever click on links to purchase coins from unknown sources. They will ask you to link your wallet, and this will allow them full access to your wallet and your coins.

Disclaimer: All information provided should not be interpreted as financial advice, nor should instructions be assumed to be up-to-date accurate. We would recommend taking extreme care and caution when trading ‘shitcoins’, and we are not responsible for the outcomes of any trades you make or actions you pursue.