In 2023, it’s not enough to create a high-quality product for success. What’re the goods if no one knows about them? Thus, due to high competition, marketing is an irreplaceable part of any modern business. However, not all ads are to be trusted. In crypto, the new “shilling” phenomenon, the aggressive promotion of any coin by someone with status, is becoming increasingly popular. We are convinced that aware means armed, so stay tuned to learn how to spot crypto shillings!
What is crypto shilling?
Do you remember Kim Kardashian pushing EthereumMax to her 200 million followers on Instagram? Vitalik Buterin, the ETH original creator, even called Kim’s promo a “borderline scam.” Well, that’s shilling — a person or a group aggressively promoting a cryptocurrency to attract new investors and pump the coin’s price. Since it’s easy to take advantage of human greed and FOMO, such schemes are not that uncommon in crypto.
How to spot shilling?
Luckily, there are ways of identifying shillings in the digital industry. As a rule, such promotions have specific features and red flags. Let’s address the main ones with real-life examples.
Influencers with no crypto background
When you see an influencer on social media without any financial background pushing a random cryptocurrency, promising huge profits, and urging you to invest right now — that’s probably a shilling. Unfortunately, many people fall into this trap, as many still view crypto as a quick way to score some money.
The perfect example is Kim Kardashian above. After the EMAX rate plunged almost 100%, “cheated” investors even filed a lawsuit against the reality star, but it was soon settled.
Investors and businessmen
Another type of shilling is when a respected business person or investor promotes a specific asset. Although it does not necessarily mean the project is a scam, there is an apparent interest conflict: the more people invest, the more profit will be generated.
Elon Musk and his Dogecoin tweets fall into this category — his statements sent meme-token to the moon in 2020. Even though Dogecoin is not a scam, it doesn’t make such marketing campaigns any less dishonest. By the way, the SEC sued Musk, who is now obliged to run his tweets by securities lawyers for approval.
Founders and team members
We would also suggest paying extra attention to project founders and members promoting the product. There is nothing wrong with such campaigns, but there are too many scams and fraudsters in the financial industry.
In 2017, a famous ICO scam took place. Three Canadian residents, Dominic Lacroix, Sabrina Paradis-Royer, and Yan Ouellet created a Plexcoin cryptocurrency and claimed investing in the token would make the investors overnight millionaires. Just think about the numbers — the whitepaper featured an ROI of 1,354%. Naturally, it turned out to be a Ponzi scheme. As a result, $8 million of investor money was lost, while Plexcoin founders were sued two years later.
Education is your scam-proof vest
Skills and knowledge are the only effective ways to avoid shillings and protect your money. We urge you always to research and conduct fundamental and technical analysis before investing in any asset.