Within the immensely huge and constantly growing universe of cryptocurrencies, something rather interesting has been going on: the so-called “zombie altcoins.” Concretely, they refer to these digital means that, in most cases, remain from some hype cycles or abandoned projects that, despite everything, are still surviving very deep into the crypto market, showing an inability to become completely obsolete and at times resurfacing with surprise for unsuspecting traders.
In this article, we will be venturing into the mystery-filled land of zombie altcoins in order to discover how they came to be, what their defining features are, and what that means both for investors and for the whole cryptocurrency ecosystem.
Origins of Zombie Altcoins
Zombie altcoins are cryptocurrencies that have lost much of their relevance and utility but remain extant due to a process of inertia or speculative trading activity. Most of these had been born out of the high times of initial coin offerings and crypto booms back in the late 2010s, when a wave of projects looked to take advantage of the interest in blockchain technology.
Once the hype died away, most of them did not fulfill or get any reasonable adoption once market conditions changed. Despite the fading interest and development activity, some of these alternative cryptocurrencies did not become extinct but they remained in limbo, a state where it’s not exactly alive but not dead either.
Characteristics of Zombie Altcoins
Zombie altcoins are characterized by distinct features that differ completely from other more vibrant and active projects within the crypto space. Some of these are as follows:
Lack of Development Activity: This could probably be one of the main defining characteristics of the zombie altcoin. As a matter of fact, there is a total absence of meaningful development activity, with most GitHub repositories often remaining abandoned or sometimes static, with little activity on updating or improving over quite a long period of time.
Low Trading Volume: Zombie altcoins are traded on obscure or low-volume exchanges, usually with very low liquidity and level of trading activity. Price movements are thus highly violent and quite unpredictable. In characteristic fashion, it mostly makes them very vulnerable to manipulation and even pump-and-dump schemes.
Community Disengagement: Most zombie altcoins disengage their communities. In fact, inactivity and sparsity of populations would attest to decaying interest and participation in their respective Telegram groups and online forums.
Price Volatility: Zombie altcoins tend to be highly prone to extreme levels of price volatility, given their generally illiquid nature and speculation surrounding their trading. Sharp volatility can occur at any time, and spikes in the price, surges in trading volume, or other sudden movements sometimes catch the uninformed trader by surprise.
Implications for Investors
To investors and traders in the crypto market, zombie altcoins represent a number of both opportunities and risks:
Speculative Potential: Zombie altcoins are, of course, a dangerous class of investment but can be subject to short-term price spikes or “pumps” due to speculative trading. To the trader adept at identifying market trends and timing entry and exit points, these can present speculative trading opportunities.
High Risk of Loss: Zombie altcoins have a number of investment risks, including potential complete loss of an investor’s money. Due to their speculative nature and intrinsic lack of fundamental value, they are very volatile and can therefore burst and rapidly decline in price any moment.
Lack of Long-Term Viability: In most cases, a zombie altcoin does not really provide a prelude to long-term viability and sustainability. A matter of fact, they even lack any ongoing development, community support, or value proposition which can make such projects very likely ever to attain relevance or widespread adoption again.
Conclusion
In fact, zombie altcoins reflect the cautionary tale about the cryptocurrency market. While these digital assets may periodically capture the fancy of speculative traders and opportunistic investors, they really signal the dark underbelly of the crypto ecosystem-a land of forgotten projects and crushed dreams.
The more the crypto market develops and gets mature, the more cautious and diligent an investor should be regarding every available opportunity that comes in their way. While enticingly quick returns may be alluring, it is prudent responsible risk management coupled with a prudent focus on projects with solid fundamentals and active development that will prove decisive for long-term success in the dynamic world of cryptocurrencies.
