Lack of belief in bitcoin and its limited use as a way of payment has encourage people to declare the token “dead” more than 400 times since 20. Let’s analyze the reasons behind this.
1. Context
After publishing its famous white paper in 2008 under Satoshi Nakamoto, this person or group of persons launched the Bitcoin network by mining the first block (the “genesis block”) in the Bitcoin blockchain on January 3, 2009. A dozen of years later, the bitcoin network stores over one trillion dollars in value and daily volumes are over $20 billion. To get there, bitcoin went through multiple boom and bust cycles in which it was praised to rise “to the moon” or declared “dead” many times over. Bitcoin however resurrected from the death every time. This cycle seems to have a rough 4 years cycle that led many to believe that long-term bitcoin prices could be predicted. Best attempt is maybe PlanB’s popular Stock-to-Flow (S2F) model.
2. Bitcoin obituary
According to www.99bitcoin.com , Bitcoin has been declared dead over 400 times since 2010 (based on articles claiming a certain death of Bitcoin). For this year alone, we count some twenty announcements. Last one being couple of days ago. Bitcoin has “no intrinsic value” according to the governor of the Bank of England and investor should be “prepared to lose all money” if they invest in them. RIP Bitcoin !
Having said that, we observed a sharp drop rate in obituaries since bitcoin’s record-breaking price action early this year, especially as Institutional investors turned net long and the magnitude of their net exposure kept on increasing. Bitcoin’s institutional buyers include giants Tesla, MicroStrategy, MassMutual, etc. Their sizable investments make announcing the bellwether cryptocurrency’s death increasingly difficult. Obviously, that doesn’t apply to all the coins available. Let’s looks at the different categories.
3. Other coins cemetery
3.1. Dead coins
We call “dead coin”, those tokens that ddisappearedt due to multiple reasons such as scams, non-operational website, low liquidity, not listed on exchanges, have nodes or wallet issues… Sometime team has stopped all development. The number of dead coins, which had minimal to zero benefits to anyone, represents more than 2000 token, therefore more than 20% of listed tokens on coinmarketcap.com.
3.2. Abandoned coins
If the token project is potentially alive but the tokens have none or negligible trading activity among investors, we call them “abandoned coins. The main difference with a dead coin is the lack of information on the reasons why a coin died, therefore it falls into the default abandoned category.
3.3. Foreseen dead coins: Shitcoins
“Shitcoins” refer to many of these coins which are traded but most likely either scams or jokes with very limited developments. Meme coins projects or projects without a real or concrete road map but still looking to raise funding fall into Shitcoins. Despite that, there are still community of enthusiasts still invest their money in them. An example could be Useless Ethereum Token (UET) as its own name stands for a Joke coin. However it held an Initial Coin Offering and attracted some 300,000 US dollars.
Unfortunately, it is sometime difficult to tell the difference between shitcoins and dead ones. Even some token considered initially as shitcoin can still become legit, later on, thanks to their community. A very good example is Dogecoin!
What is your views about Bitcoin and shitcoins future ?