Influencers are promoting altcoins to their followers with questionable motives – The Average Joe

    Influencers are promoting altcoins to their followers with questionable motives

    Victor Lei — Head of Research

    July 1, 2021

    influencers promote altcooins

    July 1, 2021

    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.

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