Crypto shilling has become increasingly popular since cryptocurrency trading became more mainstream, with advertisements being run on tv and radio as opposed to website banners and annoying ads. Before we define the term, let’s start by understanding the word “shill” from which shilling is derived. A “shill” is a person paid to assist another or an organization trade certain goods. The shill then creates an impression that they have purchased the item in question before, appearing as an enthusiastic customer to encourage others to buy it too. They show no association whatsoever with the company or seller, helping them gain customers’ trust easily. So, what is crypto shilling?
What is The Meaning of Shilling in Crypto?
Shilling in cryptocurrency, also referred to as pumping, refers to covert advertising where the shill tries to create a buzz on social media platforms such as Twitter by endorsing the crypto with the pretense of unpaid advertising when they are, in fact, getting paid. It’s super easy to identify a shilling or pick out shills from genuine customers. You must have heard talks of “the best cryptocurrency to ever emerge” or someone encouraging others to invest quickly before the price surges.
The end goal of shilling is usually to create hype around the crypto, so people buy into the buzz and trade. Due to increased demand and supply due to masses investing, the price of the project skyrockets.
Types Of Crypto Shilling You Should Look Out For
Although cryptocurrency shilling is a huge red flag glaring in your face when you know what to look for, it’s not as obvious for beginners. There are a couple of shills to look out for when trading;
The Influencer
Sorry to burst your bubble; a bunch of influencers are out to make money and not to endorse quality products. So, not all influence is good. In the crypto world, it’s common to come across influential figures such as celebrities backing a project and encouraging investors to buy into the project. The only problem is the lack of transparency because they don’t come clean as to why they are backing the specific crypto project. What we always say; go in with a clear head and not because a celebrity or anyone else convinced you it worked for them.
It can turn out the influential figure is being paid to promote the cryptocurrency, and they have zero knowledge, insights, or even interest in the project. A big red flag is always when someone suddenly becomes interested and super vocal about a project, encouraging their fans to buy in without any signs of interest in the market before.
The Avid Business Person
The strategy of shilling is referred to as pump and dump, suitable for exceptional marketers. This type of shill will buy into a project and shill it out with all they got to create a buzz and increase the crypto price. Once others buy-in and drive prices, the shill taps out, selling their share and cashing in massive profits. Once big business people or the shills tap out, the prices fall, leaving new investors in the lurch.
These shills are usually entrepreneurs or professionals in other markets making money through crypto. The red flag to look out for is a businessman hyping how much you stand to make in profits rather than the fundamental function of the project.
The Enthusiastic Founder/ Team Member
As a founder, you want the project to succeed, and so does the team behind it. So, you entice new investors, especially those new to trading, and advertise heavily, promising the sky and stars without providing a proper roadmap or showing how exactly you intend to achieve that. While it’s not as malicious as an influencer or entrepreneur, it counts as shilling because you are overselling the projects and giving false promises you have no way of keeping.
How To Avoid Falling Victim To Crypto Shilling
Before allowing anyone to influence you to buy a cryptocurrency, ensure you understand what you are walking into to avoid regret.
- Research, research, research! There is no shortcut in crypto trading. Before investing, you need to know the market like the back of your hand.
- Influence does not equal true insights, and fame does not imply knowledge and facts.
- Don’t let FOMO or YOLO drive you into doing something because all your peers are doing it.
- Always look at the person’s credentials selling you an idea or project. Do they have any previous experience with the product/ cryptocurrency they are endorsing? If no, go in with a clear head.
Key Takeaways
Shilling refers to implicit advertising of crypto by an influencer, a person with status, or one just trying to make a quick buck with the pretense of sincerity.
A shill will try to draw attention to the cryptocurrency to increase demand and supply, leading to a spike in the price.
Ensure you do your own research to avoid investing in poor projects.
The more you know about crypto, the better your chances of avoiding costly mistakes and falling prey to shilling.
