Few sectors of the crypto market offer the potential for exponential upside, but not every idea is a winner, which makes cryptocurrencies one to avoid. I'm not here to criticize my project. Do what you want with your money. That being said, you need to understand the risks.
Cryptocurrencies are extremely risky, no matter how high-profile the top coins or tokens are. Due to the lack of widespread oversight and regulation, cryptocurrencies can be highly volatile. This is true both upwards and downwards, making the sector difficult to navigate.
Logically, the further you move away from established names, the more likely you are to run into problems. For example, it is not that uncommon for speculators to lose everything due to fraud or other scams in the cryptocurrency space.
In this wild world, you have to aim to be the best. With that in mind, here are the ciphers to avoid.
Shiba Inu (SHIB-USD)
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One of the most popular virtual currencies, Shiba Inu (SHIB-USD) commands a loyal investor base. For those who know what they are doing, SHIB may be of interest. However, just as a financial advisor would not recommend foreign exchange trading to beginners, I cannot in good conscience tell you that you should seriously invest money in a Shiba Inu.
Yes, it ranks 11th in terms of market capitalization. That's a great accomplishment, absolutely. However, the problem is that the behavior is highly variable. For example, the difference between the 52-week high and low prices is nearly 700%. If you were to go in the wrong direction on this trade, you would be down over 87%. It is very difficult to recover from such losses.
It is also worth pointing out that the difference between the high and low prices over the past 30 days is nearly 59%. If you are a disciplined veteran trader, that's great. However, if you were to go in the wrong direction on this trade, you would end up losing 37%.
SHIB is one of the cryptocurrencies that novice investors should avoid, with technical analysts warning of a possible collapse.
Decentraland (MANA-USD)
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I owned some cryptocurrencies during the wild days of 2021, when it seemed like cryptocurrencies could do no wrong. Decentraland (Mana-USD). I can't really explain why I bought it because I don't remember the details. Anyway, the prices went up so much that I felt it was time to leave. MANA is connected to the Metaverse via a virtual reality platform, a concept that seemed strange (once I understood what was going on).
Again, for those who know what they are doing, MANA can be an interesting deal. But even seasoned traders are probably interested in Decentraland for quick scalps. According to CoinMarketCap, MANA's all-time high was just a few cents shy of $5. At the moment, the coin costs less than 50 cents. Looking at its technical profile, it is doubtful whether MANA will be able to return to its previous peak.
Additionally, Decentraland is under suspicion as the broader ecosystem faces significant modifications. If a weak hand breaks out of the upper tier coins and tokens, then he will probably have little chance left in MANA. I'm going to take a sensible approach. This is one of the cryptocurrencies you should avoid.
AUDIO (AUDIO-USD)
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I remember a few years ago, Audius (Audio-USD) came onto my radar as a highly touted cryptocurrency. It's an attractive concept. According to CoinMarketCap, Audius stands for a decentralized music streaming protocol. This crypto-centric website is “launched to correct inefficiencies in the music industry plagued by opaque music copyright ownership and intermediaries between artists and audiences.” It is written that “it was done”.
Simply put, Audius proposed a comprehensive way for creative and innovative musicians to get paid for their work. At the same time, fans have leveraged this ecosystem to disentangle the complex relationships imposed by the modern music industry. It could have had devastating effects. Unfortunately, investors lost money, and that's really the point here.
We need decentralization in our lives, and we can argue all day that we need decentralization. Maybe so. But if only Audius investors' returns are being disrupted, and not in a good way, then the AUDIO token has little chance of gaining confidence. Given the current situation, I think this is one of the cryptocurrencies that should be avoided.
Hexadecimal (HEX-USD)
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The Hex ecosystem, designed in December 2019, bills itself as a certificate of deposit on the blockchain. According to CoinMarketCap, “HEX is designed to be an alternative store of value to certificates of deposit, serving as the blockchain equivalent of financial instruments used in traditional financial markets.”
Crypto Resources also points out another interesting attribute of the ecosystem. “HEX allows users to stake their HEX coins to gain a share of new HEX coin issuance or inflation, encouraging actions that promote price appreciation and actions that foster damage to prices. Contains features designed to suppress
Most notably, the Hex smart contract “penalizes stakers who exit their stake early and rewards those who stake large amounts of HEX over long periods of time.” That is both an opportunity and a risk. On the other hand, if more people believe in the project, the staking process will yield greater financial rewards.
However, if Hex loses support among investors, it's over. Staking can result in larger net losses. Due to the complexity of this project, it is safe to say that for beginners, HEX is one of the cryptos to avoid.
FLOKI (FLOKI-USD)
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i have mixed feelings Flowki (Floki-USD). As a popular meme coin, this coin has great potential simply because its supporters won't take “no” for an answer. Perhaps in any other situation, Elon Musk's niche project focusing on dog names (and breeds) would be ridiculed as ridiculous. But if he's involved in blockchain, that's reason enough to justify his $1.6 billion market cap.
Well, it turns out there's more to Floki than just the name. Proponents will argue that Floki provides utility through several means, including the Metaverse and her DeFi applications. Nevertheless, the fact remains that this digital token has the same market value as a real company, one that generates revenue and employs people. In other words, Floki is in its current position because people believe that Floki will continue to rise.
To be fair, this methodology (commonly known as the Great Fool Theory) can be a powerful catalyst in blockchain. However, that also means that Floki's evaluation is inevitably questionable. It will go up until it doesn't. Therefore, it is one of the cryptocurrencies that should be avoided for new investors.
Terra Classic (LUNC-USD)
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The development process was originally underway in January 2018. terra classic (Lunch – USDAccording to CoinMarketCap, ) initially started as a blockchain protocol that used fiat-backed stablecoins to power a price-stable global payments system. This was intended to provide price stability and confidence (through fiat currency pegs) while offering ultra-fast trade settlement.
What makes Terra unique (if not completely unique) is the complex algorithm that underpins the pegging protocol. Everything seemed fine and great until a catastrophic depegging occurred. Essentially, this development destroyed the underlying blockchain ecosystem. It also cost investors billions of dollars. Unfortunately, there are few remedies if a cryptocurrency project fails.
After the disaster, the original Terra blockchain became known as the current Terra Classic. Despite the disruption and reputational damage, people are still trading assets. LUNC continues to attract speculators because it trades at ultra-low prices.
What do you think? Consider LUNC to be one of the ciphers to avoid. Although the original idea was innovative, it turned out to be unfeasible. So there doesn't seem to be much point in Terra Classic other than wild speculation.
FTX Token (FTT-USD)
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You might think bankruptcies and massive frauds would be enough to scare people away from red-hot cryptocurrencies. but, FTX token (FTT-USD) – this is associated with what disappeared FTX Platform – still transacted within the blockchain ecosystem. According to CoinMarketCap, the price is $1.47 per token at the time of writing. It confuses the mind.
However, investors in the fiat world are also speculating a similar situation.For example, a major cosmetics company lebron Following the bankruptcy filing, many traders bought the stock. Of course, this is a dangerous idea. That's because under bankruptcy proceedings, common stock shareholders are the last in line to receive anything in liquidation. Still, if the bankrupt publicly traded company can strike a deal, its stock price could soar.
That may be the only reason why some people choose to “invest” in FTX tokens. But CoinMarketCap has a clear warning. “FTX bankruptcy proceedings are underway. FTT tokens are no longer usable and may be liquidated by the Foundation to pay creditors. Proceed with caution.”
I think you can guess my stance. This is one of the cryptocurrencies you should avoid.
Publication date, Josh Enomoto did not have any positions (directly or indirectly) in any securities mentioned in this article. The opinions expressed in this article are those of the writer and are influenced by InvestorPlace.com. Publishing guidelines.
