Bitcoin Forum

I think we should stop calling them "Shitcoins" and recognize their real value and potential.  

Just like any stock on the stock market - a company can turn a stock around and increase it's monetary value; the same can be said about altcoins.

Lets just call them "PennyCoins" instead.

not really, because at least with penny stocks there's some actual potential for revenue. sure, most of it's bullshit but they are real companies attempting to do real things in theory. you can't say the same for almost all alts. they feed off their own asshole in an echo chamber.

I think they are in a lot of ways. However once a coin reaches over a certain market cap there is room for real growth. It usually means its a good idea with people working towards development.

By the way we were suppose to be getting away from centralization and companies and the traditional financial system like the stock marketAnd.. And..
I expect a whole hell of a lot better than trying to be like the stock market.
The stock market is a scammy joke itself also.
Heard of Martha Stewart or Bernie Madoff?

I think we should stop calling them "Shitcoins" and recognize their real value and potential.  

Just like any stock on the stock market - a company can turn a stock around and increase it's monetary value; the same can be said about altcoins.

Lets just call them "PennyCoins" instead.

What Makes Penny Stocks So Risky?

Four major factors make these securities riskier than blue chip stocks.

1. Lack of Information Available to the Public

The key to any successful investment strategy is acquiring enough tangible information to make informed decisions. For micro-cap stocks, information is much more difficult to find. Companies listed on the pink sheets are not required to file with the Securities and Exchange Commission (SEC) and are thus not as publicly scrutinized or regulated as the stocks represented on the New York Stock Exchange and the Nasdaq. Furthermore, much of the information available about micro-cap stocks is not from credible sources.

2. No Minimum Standards

Stocks on the OTCBB and pink sheets do not have to fulfill minimum standard requirements to remain on the exchange. Sometimes, this is why the stock is on one of these exchanges. Once a company can no longer maintain its position on one of the major exchanges, the company moves to one of these smaller exchanges. While the OTCBB does require companies to file timely documents with the SEC, the pink sheets have no such requirement. Minimum standards act as a safety cushion for some investors and as a benchmark for some companies.

3. Lack of History

Many of the companies considered to be micro-cap stocks are either newly formed or approaching bankruptcy. These companies will generally have poor track records or none at all. As you can imagine, this lack of historical information makes it difficult to determine a stock's potential.

4. Liquidity

When stocks don't have much liquidity, two problems arise: first, there is the possibility that you won't be able to sell the stock. If there is a low level of liquidity, it may be hard to find a buyer for a particular stock, and you may be required to lower your price until it is considered attractive to another buyer. Second, low liquidity levels provide opportunities for some traders to manipulate stock prices, which is done in many different ways—the easiest is to buy large amounts of stock, hype it up and then sell it after other investors find it attractive (also known as pump and dump).
How is a Penny Stock Created?

A penny stock, like any other publicly traded stock, is created through a process called an initial public offering, or IPO. First, a company must file a registration statement with the Securities and Exchange Commission or file stating the offering qualifies for an exemption from registration. It must also check state securities laws in the locations it plans to sell the stock. Then, upon approval, the company may begin the process of soliciting orders from investors. Finally, the company can apply to have the stock listed on an exchange, or it can trade on the over-the-counter market, or OTC.

Small companies and start-ups typically issue stock as a means of raising capital to grow the business. Though the process is lengthy, involves mountains of paperwork and can be quite costly, issuing stock is often one of the most efficient ways for a start-up company to obtain necessary capital. Penny stocks are often the result of such ventures and can make for profitable but precarious plays for investors.

As with other new offerings, the first step is hiring an underwriter, usually an attorney or investment bank specializing in securities offerings. The company's offering either needs to be registered with the SEC according to Regulation A of the Securities Act of 1933 or file under Regulation D if exempt. If the company is required to register, Form 1-A, which is the registration statement, must be filed with the SEC and is accompanied by the company's financial statements and proposed sales materials. These financial statements need to remain available to the public for review, and timely reports must be filed with the SEC to maintain the public offering. Once approved by the SEC, orders for shares may be solicited from the public by accompanying sales materials and disclosures, such as a prospectus.

After initial orders are collected and stock is sold to investors, a registered offering can begin trading in the secondary market via listing on an exchange like NYSE or Nasdaq or trade over-the-counter. Many penny stocks end up trading in OTC markets due to the strict requirements for listing on the bigger exchanges. The majority of penny stocks do not meet such requirements, and the companies cannot typically afford the hefty cost and regulations involved. Sometimes companies make an additional secondary market offering after the IPO. This dilutes the existing shares but gives the company access to more investors and increased capital. It is important that companies issuing penny stock keep this in mind and work to gain value in the shares as they trade in the open market. Furthermore, it is mandatory that the companies continue to publicly provide updated financial statements to keep investors informed and maintain the ability for quoting on the over-the-counter bulletin board, or OTCBB.
The SEC's Rules for Penny Stocks

Penny stocks are considered highly speculative investments. In order to protect the investor’s interest, the SEC and the Financial Industry Regulatory Authority (FINRA) have specific rules to regulate the sale of penny stocks. All broker-dealers need to comply with the requirements of Section 15(h) of the Securities Exchange Act of 1934 and the accompanying rules to be eligible to effect any transactions in penny stocks.

(1) Sales Practice Requirements §240.15g-9   

Before effecting any transaction, a broker-dealer must approve the investor's transaction (of specific penny stocks); meanwhile, the customer must give a written agreement to the broker-dealer for the same transaction. This measure has been taken to prevent manipulative, fraudulent practices in such investments. “Approving” the customer basically means checking his suitability for such investments. Approval should be given only after the broker-dealer has assessed the customer's investment experience and objectives along with his or her financial position.

(2) Disclosure Document §240.15g-2

A broker-dealer must provide a standardized disclosure document to the customer. The documents explain the risk factor associated with investing in penny stocks, concepts related to the penny-stock market, customer rights, broker-dealers' duties towards the customers, remedies in case of fraud and other important information which can be handy for an investor. The investor would be well-advised to go through this document so as to take informed decisions.

(3) Bid-Offer Quotations Disclosure §240.15g-3

It is mandatory for a broker-dealer to disclose and later confirm the current quotation prices and related information to the customer before effecting a transaction. If a broker-dealer doesn’t follow the same, it is considered unlawful. This helps the investor to keep a track of the price movement in the marketplace.

 (4) Compensation Disclosure §240.15g-4   

This rule makes the investor aware of the money being earned by the broker-dealer from a certain transaction. This can help the customer to judge if the broker-dealer has a selfish motive in trying to push a certain transaction.

(5) Monthly Accounts Statements §240.15g-6   

A broker-dealer must send to its clients a monthly account statement which discloses details such as: the number and identity of each penny stock in the customer’s account; the dates of transaction; purchase price; and the estimated market value of the security (based on recent bids and purchase prices). Such statements must also explain the limited market for the securities and the nature of an estimated price in such a limited market. In cases where there have been no transactions effected in the customer’s account for a period of six months, the broker-dealer shall not be required to provide monthly statements. However, broker-dealers should send written statements on a quarterly basis.

I agree. They behave very much like penny-stocks.

There are over a thousand companies and stocks listed on major U.S stock exchanges.  Despite tech giants like Apple (APPLE) and Google (ALPHABET) having near trillion dollar valuations, its has not taken away from the other approx 20,000 other stocks sold on various exchanges:

https://www.quora.com/How-many-publicly-traded-companies-are-in-the-world.

There are only only approx 900 Altcoins in the world compared to 20,000 U.S stocks.  

Bitcoin (BTC) has a valuation of approx $40 Billion USD but smaller Altcoins like FOOTYCASH (FOOT)  and Tatoocoin Limited Edition (TLE) have seen 5000% increases in the past week.

Are Altcoins becoming the new penny stocks?

many have called altcoin market as Penny Stocks over the years and i kinda agree with them too but i also find a big difference between the two markets.
in Penny Stocks market, it is my understanding that you trade shares of real companies so there is some reality to it. there is a physical company that is doing something. there are jobs, employees, money going in an out, ...


but in altcoins you are trading mostly "tokens" and these are mostly virtual not real. granted there is the similar blockchain technology behind bitcoin and altcoins but the differentiating factor is usefulness. when there is absolute zero usage for most altcoins and nearly no usage for the rest then they become virtual tokens changing hand.

The only difference is it's much easier to create an altcoin.
It cost you almost nothing and there're no regulations at all.

I'm guessing that in a few years we'll have more altcoins than penny stocks....

Not at all brother.
Some altcoins have future and survive then become a penny stocks but some might die and some are shitcoins.
Yes its easier to make altcoin but the question is this will have worth or can be listed in exchanges like bittrex and liqui.io? Include the fact that penny stocks and altcoins are a lot different like penny stocks are real while altcoin is virtual. Virtual that can be just real if it converted to fiat.

Not at all brother.
Some altcoins have future and survive then become a penny stocks but some might die and some are shitcoins.
Yes its easier to make altcoin but the question is this will have worth or can be listed in exchanges like bittrex and liqui.io? Include the fact that penny stocks and altcoins are a lot different like penny stocks are real while altcoin is virtual. Virtual that can be just real if it converted to fiat.

I think it is about the maturity of the market, Haesoo is right on the creation of coins and THERE IS NO REGULATION at all, however IMHO, this will not last for long. As more and more "investors" participates in ICO, it will be a matter of time before regulators step in and impose control. As long as the interface between fiat currency and crypto is "choked" at Financial Institutions (withdrawal of deposit of fiat to buy/sell), there will be a possibility of regulatory oversights.

However, all that being said, it might come a time whereby exchanges take on the role of being the "gatekeeper", i.e. if altcoins do not pass their due diligence test, it will not be listed. If altcoins is not listed in "major" exchanges, it will make it less attractive to invest.

who knows... future ICO would have a pre-condition of being accepted to exchanges before launching?

Yes, you can say it penny stocks, but some times, a penny stock will be a big story in future. in 2009, BTC was also in penny stock category, but now it is a benchmark for whole crypto currency world.

These days tokens are like giving your money to a kickstarter project, but instead of receiving the first product or prototype you might get scammed and lose your money. On the other hand if the project succeeds it might become a huge company one day.

So do you think altcoins are more risky than "Penny Stocks", or less?

That is the point I was trying to make.

Just like small penny stocks can be bought out when they go up in value; the same can be said of altcoins.

I agree that the exchanges will be the gatekeepers.  Exchanges will also be bought out by wall street!

I think we should stop calling them "Shitcoins" and recognize their real value and potential.  

Just like any stock on the stock market - a company can turn a stock around and increase it's monetary value; the same can be said about altcoins.

Lets just call them "PennyCoins" instead.

Thats absolutely true, altcoins have a great potentials. Sometimes there are really intresting project behind them and they can easily compete on stock market.

You are right, it would be just a matter of time whereby exchanges would be run by the big boys (if it ain't the case now), we could see a uprise of "authority" who provides "ratings" for ICO like how S&P/Moody/Morningstar/etc are providing as a service, however their impartiality was also questioned during the sub-prime crisis.

Bottomline, do your own assessment on the underlying biz and make a decision if you want to punt.

Is there really such a thing as a "shitcoin"?

Do you think the SEC will start regulating these coins?

Absolutely, yes. The biggest opportunities for profit, also the most dangerous.

Do you think the SEC will start regulating these coins?

I bought Litecoin when it was $0.03 USD.

No you didn't.
And why are you "member" status then ?
Abandoned your other account for some reason ?
I also suspect i know who you are too.. and no that is not a good thing.
You are like a cock roach here in crypto.

Why ask a stupid question with the topic here ?
Did you even Google search what exactly a PennyStock is technically ?

I love how you guys piece fit the definition to suit your needs but ignore the rest that don't match.
You "need to get paid" the OP said to me here before using one of his other MANY accounts.
So you *NEED* to legitimize this silly bullshit.. to get paid.
Which means ignoring all the parts that are NOT "Like Penny Stocks"
Like ?
Well one is suppose to be a currency.
If it is not a currency then it is a scam.. there i no such thing as a token or asset.
These are not stocks.. so your comparison is dead in the water.
The US dollar or CAN dollar is not a penny stock.. and neither are these.. they are scam coinz for profit.

Further more there is strict laws, rules and guidelines for penny stocks.
In crypto ? NONE.
What makes a penny stock ? Regulations.

There is 0 legitimacy in any Altcoin shit aside from a couple old fair launched coins.
The rest of this shit is silly ass retarded scammy faggotry and you all know it too.
But you loiter around trading them for profits and trying to legitimize them by calling them "PennyStocks" simply to profit off them.

Lets just call them "PennyCoins" instead.

I like this idea!

@ heroinme

Don't be a troll.

I think we should stop calling them "Shitcoins" and recognize their real value and potential.  

Just like any stock on the stock market - a company can turn a stock around and increase it's monetary value; the same can be said about altcoins.

Lets just call them "PennyCoins" instead.

Indeed. Altcoins also have their value and purpose that is why they are established and put into usage just like what many have done in bitcoin. Altcoins must not be underestimated because their value is also cost a worth. They maybe called into "Penny Coins" not shitcoins because altcoins can do have their own use.

I really see them from the start as penny stocks.

Pump and dump

SOme coins pump and dump only, never think about wall street. All you need to do is how to make coins are reality. I mean just buy real projects. When market trust to real project more people soon will turn to crypto exchangers. It means more transaction and more value. The benefit for traders is volume. When volume of transaction is higher the opportunity to make profit is higher too.

You have to have a strategy for altcoins - either short-term or long-term.  

There is really no such thing as a "pump and dump" coin.  That is just a complaint that early investors make when the original ICO price drops in the short-term.  Unless the dev abandons the project, there will be long-term gains to be made - no matter what the altcoin.

I totally agree you have to have a strategy, is that particular investment a strategic or tactical investment? Strategic investment should have a longer term view whereas, a tactical allocation is more like a punt.

Actually "pump and dump" happens in the stock market as well, just that they arent as blatant as ppl in the crypto world and there is BIG BROTHER watching.

You are absolutely right!

We live in a society where the law of supply and demand is paramount. 

Investments are risk and reward ventures.

You are an idiot.
You are side stepping the concept that some coins are bad and some are good.
This shitty little greedy stupid selfish childish mentality where anything goes is pure bullshit.
Grow up Investards.

How is supply & demand with any historical scam like a Pyramid scheme ?
Works the same way doesn't it ?

I keep telling all you idiots but you have your head in the sand playing dumb..
..or you are.

Depending on how it progresses. I think nothing is impossible, everything can be achieved if the management works well.

Just like on Wall Street there are good companies and bad.  What does that have to do with anything?

Just like bad companies can be bought out and turned to good; so can bad coins be forked or relaunched and made good. 

DASH was not a success overnight and there was a time when it too was considered a "shitcoin". 

Look at how many versions of DASH there were before they got it right.

Just like on Wall Street
Just like on Wall Street
Just like on Wall Street
Just like on Wall Street
Just like on Wall Street
Just like on Wall Street
Just like on Wall Street

Yeah i get it buddy.. harping and repeating your same stupid shit doesn't make it true.

ICO are here to stay and i think this will be the new way to raise funds.
however, investors still need to do their homework before throwing their money into the project.

There are over a thousand companies and stocks listed on major U.S stock exchanges.  Despite tech giants like Apple (APPLE) and Google (ALPHABET) having near trillion dollar valuations, its has not taken away from the other approx 20,000 other stocks sold on various exchanges:

https://www.quora.com/How-many-publicly-traded-companies-are-in-the-world.

There are only only approx 900 Altcoins in the world compared to 20,000 U.S stocks.  

Bitcoin (BTC) has a valuation of approx $40 Billion USD but smaller Altcoins like FOOTYCASH (FOOT)  and Tatoocoin Limited Edition (TLE) have seen 5000%+ increases in the past month.

Are Altcoins becoming the new penny stocks?



UPDATE:

With the Feds now trying to regulate tokens like DAO, does this mean that altcoins are poised take over Wall Street?