NB: you can find a link to my full list of scam coins in this article. And a follow-up to the current article in another one I wrote, here.
I’ve been getting more and more interested over the recent months in what I call “scam coins” or “manipulated coins”. This interest picked up after we saw three absolutely insane pumps three months in a row from $MYX, $COAI and $AIA, which did all reach the crazy high valuation of $20bn FDV.
When these meteoric rises were happening, I was completely shocked to witness it. I was also shocked that, while I considered it a 3 sigma event, most crypto natives didn’t even seem to care and were barely looking at these coins.
For a long time, my focus was on trying to fade these coins because they were inevitably going to fall hard from their stupidly high valuations. Obviously that’s what ended up happening (-97% for $MYX, -98% for $COAI, -99% for $AIA), but the problem is that they can reach retarded valuations way before they top, which makes shorting them an extremely dangerous game.
For reference, Monad, one of the most hyped projects of the cycle, has topped at $5bn FDV and is currently not even trading at $2bn FDV. The three coins I’ve mentioned above probably have less than 1/100th the level of mindshare of $MON, and yet not only did they reach $5bn FDV… but they actually 4X’d after that.
So I progressively flipped my view on these scam coins, and instead of being bothered by their over-valuation, I started embracing them. If shorts are getting absolutely destroyed because of a midcurve thesis, then maybe the right trade is to actually long these coins?
And indeed, this new approach has been much more efficient and profitable for my account, so I decided to write this article, to share all the lessons I’ve learned on that topic. And there are a lot of them…
What is a scam coin and how to spot them?
There is obviously no strict definition for a scam coin (or “crime coin”), it’s just my term for coins that are manipulated (by the team or an external actor) and inorganic, and also very likely to pull out some “scammy pumps”, which are usually brutal, strong, and engineered to rekt shorts.
Here are the characteristics of a scam coin and how to spot one: