If Benjamin Graham were alive today, the flood of “investment” in bitcoin-knockoffs affectionately known as “sh*tcoins” probably would have killed him.
By this point in the cycle, everybody in America seems to have a friend or a cousin who has made tens of thousands investing in Dogecoin or some other altcoin like CumRocket or Poocoin or the Dave Portnoy-approved SafeMoon. Like Portnoy said in his now-infamous comment made in a video announcing his endorsement of SafeMoon: “If it is a Ponzi, get in on the ground floor.”
Portnoy said he likes the name because the moon is “where he wants to go.” Can’t argue with that logic.
My shitcoin announcement. Invest at your own risk. I have no idea how this works pic.twitter.com/G1iW8iZTWG
— Dave Portnoy (@stoolpresidente) May 17, 2021
In an attempt to bring some transparency to the opaque cottage industry that is churning out sh*tcoins, a team of Bloomberg reporters interviewed investors, coin creators, promoters and others who have become integral pieces of the crypto universe. By one firm’s count, some 10K new coins have been minted this year alone. Nic Carter, a prominent voice on crypto twitter, said “it’s the most aggressive capitalism we’ve ever seen…it’s global. It’s 24/7. And it’s completely unregulated,” Carter said.
Launching a coin doesn’t cost very much. What costs money is the marketing. Fab, the creator of the “SuperDoge” token, told Bloomberg that he spent $150K over 20 days on influencers. He also spent another $25K to get it listed on an exchange. At one point, Facebook said it would ban advertising of alt-coins. But for SuperDoge, Facebook ads, and ads on 4chan were crucial – along with efforts to reach “investor groups” on Telegram.
Bizarrely, one promoter who spoke with Bloomberg who charges up to $10K per post to promote sh*tcoins argued that the amount a coin’s founder is willing to spend on market is, in the industry’s eyes, a measure of the coin’s potential success: “If someone is paying good money for 10 influencers to go on YouTube, Instagram and Twitter to be pumping this thing, then that means there’s a real big backup behind this coin,” Heman says. “It’s like the tip of the iceberg. What you don’t see is the 90% underneath.”
Thanks to the DeFi boom, decentralized exchanges make it easier than ever for coin creators to get their product listed. One trader who spoke to Bloomberg described a revelatory conversation they had with their wife after selling his dogecoin before it mooned.
More than three months later, Hackney glanced at Robinhood again. He had long sold his Dogecoin because he hated the wild swings in its price. But seeing its surge to 70 cents in early May stung. He felt he’d missed the boat again. He turned on Coldplay and stewed in the dark. He vowed: never again.
His wife tried to talk him down.
Don’t you get it? she asked.
Get what? Hackney replied.
People nowadays like stupid shit. They don’t’ care. They follow the crowd.
“And I had an epiphany,” Hackney recalls. “I realized the money was, in fact, in the garbage late-night coins you would never consider hooking up with unless you were half in the bag.”
He was talking about crypto like Papa Shiba, OMG, SafeMoon, Baby Shiba, SpaceCorgi, TacoCat — Shit Coins that makes Bitcoin and even Dogecoin look like good old-fashion dollars.
“It’s insane,” Hackney kept thinking, “but it’s reality.”
This epiphany is what led him to drop $500 on a coin called “$ASS Coin” one night after a few Bud Light Mango Mai Tais: “Screw it. Let’s go. Let’s see what happens,” he thought to himself.
Another interesting twist: Feb “the Creator” of SuperDoge was a restauranteur who was simply trying to save his business. “I got a few 10x going and – Boom! I was back in the game,” Fab said.
Now, crypto has inspired him to dream big.
“People are doing it because there’s an opportunity to make a lot of money very, very quickly,” says Carter of Castle Island Ventures, a blockchain venture capital firm. “It’s the promise of fantastic, multi-thousand percent returns.”
“Of course, are any of these coins going to stick around and exist in three years’ time? Definitely not.”
If Fab gets his way, SuperDoge will be an exception, this week’s meltdown aside. He’s says he’s thinking big — like, global brand big. Comic books, an animated Web series, action figures, maybe a movie: this man has dreams. “We want to become the Marvel of the cryptocurrency world,” Fab says.
Right now, the alt-coin universe is still reeling from the selloff in crypto, and most investors who got in late are probably nursing heavy losses. But hey – if thousands of unemployed schlubs managed to earn tens of thousands of dollars investing in a sh*tcoin called Poocoin, then even the most outlandish crypto dreams can seem attainable.