Influencers are promoting altcoins to their followers with questionable motives
Cryptocurrency is the brave new world of investing and everyone wants in — including influencers with questionable motives. Many are promoting investments called “altcoins” a.k.a moonshots, but beware…
What are altcoins? Simply put, they’re any cryptocurrency that’s not bitcoin, like dogecoin and Ethereum.
- They claim to address bitcoin’s core issues — i.e. long transaction times and negative environmental impacts.
- There are over 9000 altcoins, but many went bust — leaving investors with big losses.
What are the risks? Cryptocurrencies are highly speculative — their real-world application is in the early stages while carrying many risks:
- Extreme volatility: In May 2021, within just ten days, dogecoin dropped by 40% and Ethereum by 45%.
- The market for cryptocurrencies is lightly regulated, leaving few barriers for those promoting them — so their advice could be sketchy.
“Not financial advice”: Which is what all influencers say. But can you blame individuals for being influenced by influencers’ “non-advice”?
- Sam Pepper, a TikTok/YT influencer, promoted MoonPug Token to his 4.1m followers — which was a pump and dump and is now defunct.
- Marc Cuban, the billionaire entrepreneur and crypto advocate owned and promoted the Iron Titanium token — which fell from $65 to 0 within a day.
Marc Cuban, who probably had a small bit of his portfolio in Titan, can afford to take this hit. Question is, can you? Our take: be smart about your exposure to altcoins — anything can happen.