Everywhere you will find tips on what cryptocurrencies to invest in. This time we will tell you which projects are best avoided in order not to lose all funds!

Avoid cryptocurrencies:

-With low or unknown market capitalization

- Technically not meeting the "real"

- cryptocurrency criterion Pump-and-dump type

Cryptocurrencies with low or unknown market capitalization:

It is usually the case that people taking their first steps on the cryptocurrency market find out about Bitcoin at the very beginning. This is not surprising, after all no altcoin can match its popularity. A rather disturbing phenomenon in all this is that most users strongly believe that each subsequent cryptocurrency will be able to achieve the same success. How are such false ideas born? It usually begins with a story that someone who once bought Bitcoin and became a millionaire after a few years. Then the novice investor enters the phase of searching for "cheap" coins to make them magically grow like the first cryptocurrency. It's worth getting rid of such beliefs - the sooner the better! Whether a project will spread its wings and, as a consequence, its value increases, depends to a large extent on the progress it is making. A fairly important thing to keep in mind is that cryptocurrencies with low market capitalization are subject to a much higher risk than those at the beginning of CoinMarketCap. Why? Well, such coins are only in the development phase or simply offer nothing. They have a small community and low trading volume. For this reason, it is much easier to manipulate their price (pump-and-dump). A large player can enter the market to artificially raise the course and then leave it with the loot. In this case, there is the potential to earn as well as lose a huge amount of funds. Suggesting only a percentage increase, so it's not the most sensible move. Interestingly, it even happens that the creators do not provide the market capitalization of the project for public review. At this point you should see a red lamp! The analogy here is, for example, Futuro Coin (FTO). Its price has increased in the last 24 hours by almost 500% (according to CoinMarketCap).

Cryptocurrency forums were quickly flooded with questions about the sudden launch of the FTO course. Although it may look interesting on the chart, there is some anxiety here ... And the design associated with this coin raises a lot of controversy ...

R0EMEMBER: Cryptocurrencies with low or unknown market capitalization are subject to high investment risk!

Cryptocurrencies, which technically do not resemble "cryptocurrencies"

Here, we would like to refer to all "pseudo" cryptocurrencies. That is, those that only have a name with them. Of course, we will not discuss centralization and decentralization here. All coins using multilevel marketing (MLM) are under fire. An example was, for example, OneCoin - the financial pyramid, which ended its life in December last year.

The cryptocurrency market is full of cheaters. They exploit the ignorance of inexperienced people. OneCoin alone has soared the eyes of naive users for about 5 years. Ruja Ignatova - hailed as the escaping queen of cryptocurrency, claimed that she was in competition with Bitcoin itself. In fact, however, OneCoin had no intrinsic value except that developed by marketing. However, the life span of such patterns ends sometime. This was also the case here. DasCoin (DASC) is another warning. Although it was supposed to be the second Bitcoin, it turned out to be virtually worthless cryptocurrency. At the beginning of 2020, the Office of Competition and Consumer Protection argued that this is another financial pyramid. Similar alarms have already appeared before.

The Polish Bitcoin Association and the Trading Jam Foundation warned against DasCoin, among others. Investors, deluded by a desire to profit, naively entrusted him with their money. In fact, all the profits came from new people who joined the scheme. They bought worthless licenses to be able to dig this pseudo cryptocurrency. There are many similar examples. All of them are based on similar assumptions. Pump-and-dump cryptocurrency Pump-and-dump is the market manipulation scheme. As an example we can use here, for example Mindol (MIN). We already wrote about this cryptocurrency in December last year, when it gained new levels in CoinMarketCap ranking at an unimaginable pace. She even jumped to 20th place. After quite large increases (in the amount of 65%), the time has come for a strong drop and another pump.

Today, however, Mindol occupies 202 position. His course remains unpredictable. Just look at the chart. Although most cryptocurrencies fluctuate strongly, those shown by MIN are not normal. Comparing them to the behavior of Bitcoin or Ether, we can conclude that against them, Mindol looks quite unsteady. Source: CoinMarketCap Before investing, it is worth following the history on the graph of the cryptocurrency. If it looks like this, it's better to be careful because it is both an unstable and risky resource.