The idea of quick gains in crypto has created situations where greed has led to losses.
Pink Wojacks – a meme signifying despair, helplessness, and stupidity. In the world of crypto, the memes arrive shortly after a catastrophic loss, breaking all hopes for a lucrative outcome. The Confido ICO, the ZClassic pump and crash – all those situations show that crypto remains risky.
But there are situations where the risk is heightened, and the opportunities are highly toxic. Here are the top 5 crypto chances to avoid:
Hard Fork Mania: This one did not pass up Bitcoin, which rose to one of its price peaks, then fell in August 2017, around the time of the Bitcoin Cash hard fork. But smaller coins that promise a fork are just as risky. For some reason, even the mention of a hard fork sometimes raises the price – even if no one receives a new asset, and the hard fork is just a software update. If a coin is too noisy about its hard fork, promising huge improvements, it’s better to wait out the hype.
Mainnet Hype: Many projects in the past year went through a phase where they existed as an ERC-20 digital asset. The launch of their own staking or mining protocol was seen as a huge event. And in the case of TRON, or EOS, it was indeed a big event. But for projects like DADI (DADI), the mainnet launch did very little to revive the price. The SONM (SNM) project also saw no significant price effect. But in some cases, the expectation of a mainnet launch or a token migration may see the price rise disproportionately. There is no guarantee that an asset would be worth more with its own network – so be careful when choosing a coin or a token based on the promise of a new blockchain. Bitcoin launched its chain in obscurity, and did not make a fuss about its Genesis block. And in the case of Oyster Protocol (PRL), the delayed mainnet launch added to the general price drop.
Airdrops Alerts: Everyone loves free coins. Buy one, get one free. But is it worth it? Snapshots, high expectations, and an asset for free – what’s not to like? However, in the case of the SuperNet (NXS) and Ardor (ARDR) snapshots, the price tanked right after snapshot day. NEO also tanked after the Ontology (ONT) airdrop. Also, one project can do a limited number of airdrops before losing credibility. Now, the DAPS Project promises an airdrop to PeepCoin (PCN) holders, after canceling the asset swap. But the PCN price tanked again to 1 Satoshi, losing half its value after one short-term final spike.
Hope to Pump: Some crypto traders are straightforward – they are looking for coins with regular pumps, because activity means short-term profits. However, for the new buyer, this may be the worst kind of investment. Pumps may be slow to come, or, as it happened recently, the bear market weighed heavily on prices, and pumps were not as powerful. Choosing a coin that has a history of pumps may mean its price can also tank without the artificial price boost.
Just an Overhyped Coin: If a crypto asset promises to solve all problems of older technologies, bring world peace, and cure all disease, be skeptical. Especially if there is a talk of a new economic ecosystem involved – those may be a cover for a Ponzi scheme. Projects like Centra (CTR) came with a bit too much enthusiasm. Davor Coin (DAV) also had a similar story of promising incredible results. But there are no guarantees in crypto – and a lot of coins are riding on the hype of the late 2017, making newcomers believe this time it would be different.
In fact, solid projects take years to prove themselves, and not one promises immediate returns. So if a coin has an overactive social media campaign, and seems to be shilled too much on Twitter, it’s a buyer beware market. At best, such an overhyped asset can be volatile, like LINDA (LINDA), which saw recent promotions on social media. At worst, it can lead to a speedy crash, as in the case of SkyCoin (SKY), which was beset by scandals and the overhyped market price sank fast when a coin theft and dumping surprised all the hopeful backers.
While all of the above events have created some legitimate gains, relying on those milestones may sometimes lead to losses, as coins and projects sometimes overpromise and underdeliver.
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