Shitcoins are like fake coins that don’t work very well and can be a waste of money. And Vitalik Buterin, the co-founder of Ethereum, is aware of that.
That’s why he has sold off the meme coins that were gifted to him in a move that sent shockwaves through the cryptocurrency community.
Buterin recently sold nearly $700,000 in shitcoins comprising of Cult DAO (CULT), Mops (MOPS), and Shikoku (SHIK), according to Lookonchain data.
vitalik.eth (@VitalikButerin) is selling his free shitcoins.
Currently sold 50B $MOPS for 1.25 $ETH($2K), sold 10B $CULT for 58 $ETH($91K), sold 500T $SHIK for 380 $ETH($600K).https://t.co/SboWZsO8WY pic.twitter.com/xNaRTeVM7K
— Lookonchain (@lookonchain) March 7, 2023
Why Vitalik Buterin Is Offloading Shitcoins
Buterin has a habit of getting rid of enormous sums of coins that lesser projects frequently send to his address.
The Ethereum co-creator is well aware that getting rid of free meme coins can significantly depress prices and deplete liquidity.
Some assume he is selling to offset the expense because the proceeds will be included as income on his tax return.
Some believe it has something to do with testnet tokens, particularly Goerli ETH. According to DEXTools data, approximately $0.5 million in gETH has been transacted in the last 24 hours, with a total of 11.88 million GETH in circulation.
In 2021, Buterin disposed of 90% of his Shiba Inu (SHIB) and promised to donate the remaining 10% to charity.
Image: Kayode Ola/Medium
Impact Of Selling Off Shitcoins
Meme coins are cryptocurrencies that are often created as a joke or for fun, and are not necessarily backed by any underlying asset or utility.
Offloading shitcoins, which means selling or exchanging them for another currency or asset, can have different effects depending on various factors, such as the popularity and liquidity of the particular meme coin, the current market conditions, and the volume of coins being offloaded.
In general, if a large number of people offload their free meme coins at the same time, it can lead to a decrease in the value of the coin due to an increase in supply and a decrease in demand.
This effect can be amplified if the meme coin is already experiencing a bearish trend or if there are concerns about the legitimacy or viability of the project.
Crypto total market cap drops from the crucial $1 trillion level, and now pegged at $975 billion on the daily chart | Chart: TradingView.com
On the other hand, if the meme coin has a strong and active community, and there is a steady demand for the coin, offloading free meme coins may not have a significant impact on the price.
In some cases, offloading may even have a positive effect, as it can help to increase liquidity and trading volume, which can attract new buyers and investors.
Ultimately, the effect of offloading free meme coins depends on many factors, and it’s important to consider the specific circumstances and market conditions before making any decisions.
-Featured image from Healthline