This is the allure of "shitcoins." Dextools If, with fantastic luck, you invested $1,000 at $8 and sold at $1,750, you'd be up $217,000. This disconnect between price and purpose has made many experts understandably skeptical.Īfter launching at around $8 in August, the obscure Meme coin briefly reached a valuation of over $1,750 in September. After the price settled, it then rocketed once more when Reddit wanted to make it the GameStop of cryptocurrency. Doge, a coin marketed after the internet slang for "dog," doubled in value in January after a pornstar tweeted about it. That's a little under 15 times the price of an Apple share. As I write this, a coin called Meme is selling for over $2,000. People are investing in technology that produces nothing, and as yet has little or no practical application. For the most part, cryptocurrency is pure speculation. Cryptocurrency, however, takes speculation into the stratosphere. Speculation is naturally part of this: The Dot-com Bubble was all about pouring money into "pre-profit" companies in the hopes they'd make money someday. If other investors follow you, the stock rises, giving you an opportunity to take profit. Investing in a stock means ascertaining its value - based on factors like competition, risks and, above all, profit generation - and then putting money into ones that are undervalued. If you invested $1,000 in early November, you could have taken out $2,600 in early February. Bitcoin nearly tripled in price, from $15,000 to over $40,000, in two months. Right now cryptocurrencies don't really do anything. The community is enthusiastic, but there's a small problem. He met people in Telegram groups, and was able to track their trades using apps that follow a user's wallet - a common practice within cryptocurrency circles. Decent result, but his $150 would've turned into $28,000 if he'd waited only one more day. Another put $150 in a coin and doubled his money in 15 minutes. One person managed to flip $2,000 into over $40,000 on two different occasions, but lost it all to scams both times. After withdrawing a third of that and then losing just over another third, he now had around $20,000 in crypto.Īdam had seen some tempestuous trading in the weeks prior to DeTrade. When we spoke, it felt like he'd crammed years of trading into two months. Million-dollar jokeĪdam got into cryptocurrency last September. Just a regular day playing with altcoins, says Adam. In total, those behind the scam took in around $2 million. Adam lost his $2,500, but he got off easy. Those behind it, operating in the unregulated world of crypto, vanished.
The LinkedIn profiles were fake, and the video of its CEO was a deepfake created with AI. The touted technology behind it wasn't real. Cons and fraudsters are everywhere, with traders vulnerable to scams at each step of the process.Ĭase in point: Adam's foray into DeTrade. Fortunes can be made and lost in seconds. The spoils can be life-changing, but there are traps around each corner. The most famous is Dogecoin, which recently shot up past 10 cents thanks to a potent combination of Reddit and Elon Musk, but there are thousands of altcoins, forming an Indiana Jones-esque Cave of Crypto Wonders. Bitcoin tripled its value recently, but many altcoins explode 30, 40 or 50 times over within days. Beneath Bitcoin and Ethereum, the second-best-known currency, is a strange underworld of different cryptocurrencies.Ĭalled altcoins or, sometimes, "shitcoins," these are essentially penny-stock cryptocurrencies. But while for many people Bitcoin is synonymous with cryptocurrency, it's not what crypto traders like Adam are interested in.
On Tuesday, ahead of CoinDesk's listing on the NASDAQ, it reached an all-time-high of over $63,000, exploding almost 10-times in value compared to the same date last year. A newswire piece published on Yahoo touted DeTrade's technology as advanced enough to disrupt cryptocurrency.īitcoin is very much back in the zeitgeist. Adam had investigated the coin's development team on LinkedIn, and watched a video of its CEO laying out a roadmap for the coin's future. He was about to sink $2,500 into a cryptocurrency called DeTrade. But Adam wasn't trading on the NASDAQ, pumping GameStop stocks or investing in a startup. He'd made thousands of dollars on a single trade the night before, and was feeling lucky.
It was a Saturday morning in December and Adam was feeling bold.
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