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In this article, we discuss the 10 cryptocurrencies Redditors will never buy again. If you want to skip our discussion on the cryptocurrency market, go directly to the 5 Cryptocurrencies Redditors Will Never Buy Again.
The year 2021 saw the cryptocurrency market record historic gains. The market capitalization of all cryptocurrencies hit a high of about $3 trillion in November 2021. However, only two months later, the market cap dropped by 40%, wiping off more than $1.2 trillion. Market volatility and increased regulatory scrutiny have dimmed cryptocurrencies’ prospects lately. Experts have cautioned that a further decline in the market may be imminent. The co-founder of Absolute Strategy Research, Ian Harnett, believes Bitcoin is likely to touch the $13000 level in 2022, reflecting a decrease of around 40% from the present price. Ian highlighted that Bitcoin follows a trend of declining 80% from its all-time high after each crypto rally. For example, the cryptocurrency plunged to nearly $3,000 in 2018 after peaking at around $20,000 towards the end of 2017.
The cryptocurrency market is tense as investors consider how increasing interest rates would affect assets that thrived during a time of a relaxed monetary policy. In an effort to rein in spiraling inflation without triggering a recession, the Federal Reserve raised interest rates by 75 basis points for the second time on July 27. Since the Fed started utilizing the overnight funds rate as its central instrument of monetary policy in the 1990s, the movements in June and July constitute the most rigorous consecutive action taken by the authorities. Prior to the interest rate hikes by the Federal Reserve, the cryptocurrency market was already in turmoil, with investors alarmed due to the $60 billion crash of the well-known stablecoin TerraUSD and its sister token Luna. Fluctuations in the cryptocurrency market send shockwaves across numerous industries as notable companies like Tesla, Inc. (NASDAQ:TSLA), Block, Inc. (NYSE:SQ), and NVIDIA Corporation (NASDAQ:NVDA) have significant exposure to the crypto market.
The increasing number of fraudulent schemes and scams in the crypto market has also contributed to investors having a bearish outlook on many cryptocurrencies. According to the Federal Trade Commission’s report, investors have faced a cumulative loss of more than $1 billion from the start of 2021 to March 2022. Bitcoin accounted for 70% of cryptocurrency-related scams; Tether made up for 10% of the scams, while Ethereum’s contribution stood at 9%. In the most recent instance, 11 people were charged by US authorities for their involvement in a massive cryptocurrency pyramid scheme that deceived retail investors worldwide out of more than $300 million. The accusations, which concern a Ponzi scam named Forsage that has been running for over two years, were made public by the US Securities and Exchange Commission (SEC) on August 1. The agency filed charges against a number of marketers and suspected founders of the Ponzi scheme.
There are currently more than 19,000 cryptocurrencies in circulation around the world. The magnitude of this figure can be gauged by the fact that the number of cryptocurrencies in circulation is three times greater than the stocks listed on the markets in the US. For a potential investor, it is nearly impossible to track down the fundamentals and performance of each of the coins. Most investors are only able to keep up with the performance of notable coins like Bitcoin USD (CCC:BTC-USD) and Ethereum USD (CCC:ETH-USD), which makes it very challenging for investors to pinpoint which cryptocurrencies to buy and avoid. This is where the power of the Reddit community and the wisdom of the crowd comes into play.
With this context in mind, we have curated a list of 10 cryptocurrencies Redditors will never buy again. We will look at the reasons for the investors making this call on these currencies. We have referred to notable subreddits like r/CryptoCurrency, r/CryptoCurrencyTrading, r/CryptoMarkets, and r/altcoin. to shortlist the currencies.
10. Celo USD (CCC:CELO-USD)
Market Capitalization: $472.02 million
Celo USD (CCC:CELO-USD) is a blockchain ecosystem that was launched in April 2020 to increase the adoption of cryptocurrency by smartphone users. The blockchain network uses a telephone number as the public key and allows the user of a smartphone to conduct transactions in cryptocurrency.
The cryptocurrency platform claims to have the fastest transactions per the second potential of 140,000 transactions. The Reddit community thinks of this claim as comical and a false marketing strategy similar to Solana USD (CCC:SOL-USD). Users think that such claims should be monitored because potential investors and decentralized applications (dApps) look at such numbers and divert their resources towards these platforms accordingly. Redditors have also gone on to say that lawsuits should be filed and damages should be claimed against Celo USD (CCC:CELO-USD) for creating strategies intended to benefit certain groups. The cryptocurrency has an all-time low and high of $0.7955 and $10.66, respectively.
9. Loopring USD (CCC:LRC-USD)
Market Capitalization: $568.09 million
Loopring USD (CCC:LRC-USD) is an audited, non-custodial, and open-sourced platform aimed at creating decentralized crypto exchanges and payment protocols based on the Ethereum blockchain network.
Reddit users claim that there is an absence of proper communication from the management at Loopring to its audience on Reddit and Discord platforms. Furthermore, Loopring USD (CCC:LRC-USD) has failed to deliver on its promises as it was unable to get LRC as a payment method on the NFT marketplace launched by GameStop Corp. (NYSE:GME) on June 11. Loopring USD (CCC:LRC-USD) also reversed the decision to have an in-house zero-knowledge Ethereum Virtual Machine (zkEVM) development team. The decision of not having a zkEVM development team in-house has been considered a red flag by the Reddit community. The development team was supposed to be a significant milestone that would have taken Loopring USD (CCC:LRC-USD) a level above all the other level two solutions on the Ethereum blockchain. It would have increased the value of Loopring USD (CCC:LRC-USD) as a token. Since the start of 2022, the cryptocurrency has lost more than 79% of its value.
8. Curve DAO Token USD (CCC:CRV-USD)
Market Capitalization: $696.89 million
Curve DAO Token USD (CCC:CRV-USD) was launched in January 2020 and is used on the Curve DAO platform for governance purposes.
Curve DAO is a decentralized exchange (DEX) that plays the role of an automated market maker (AMM) and provides the best possible exchange rates. DEX is focused on stablecoins like Tether USD (CCC:USDT-USD), USD Coin USD (CCC:USDC-USD), and Binance USD (CCC:BUSD-USD). The values of all these stablecoins are connected to an asset in the real world.
The maximum supply of Curve DAO Token USD (CCC:CRV-USD) is set at 3.3 billion units, and the distribution mechanism is highlighted in the project’s whitepaper. The token is currently trading at around the $1.3327 level. This reflects that the coin has lost over 97% of its value from an all-time high of $60.50 experienced in August 2020. Reddit users think it’s unlikely for Curve DAO Token USD (CCC:CRV-USD) to be able to achieve the same levels again.
7. THORChain USD (CCC:RUNE-USD)
Market Capitalization: $864.43 million
THORChain USD (CCC:RUNE-USD) is the native cryptocurrency on THORChain. It is a decentralized liquidity platform that permits investors to conveniently exchange their cryptocurrency assets through a diversified range of networks without giving up complete custody of the assets during the process.
The Reddit community highlighted that the THORChain platform uses a multi-signature (multi-sig) wallet, which is considered inefficient and very slow based on its transaction speed. To overcome this shortcoming, THORChain funds individual nodes to complete the majority of transactions. This gives the nodes complete control over the funds. If any funds are stolen, THORChain just slashes the amount away without taking into consideration the amount present with them.
Furthermore, THORChain has slip-based pools, and in case of a mass exit, the remaining users would be forced to pay huge slip fees, which would slow down the process of investors exiting their position.
6. Helium USD (CCC:HNT-USD)
Market Capitalization: $1.142 billion
Helium USD (CCC:HNT-USD) is the native cryptocurrency on the Helium Blockchain that is expanding its presence through the People’s Network. The People’s Network is a decentralized wireless infrastructure with a presence through 911,000 hotspots.
The blockchain network has come under attack from famous angel investor Liron Shapira. The CEO and co-founder of Relationship Hero claim that only $6,500 worth of Helium USD (CCC:HNT-USD) was generated monthly for investors who have invested hundreds of millions in the firm. Mr. Shapira claims that users who have spent $400 to $800 on hotspot nodes are complaining about weak returns and are receiving only $20 per month as opposed to anticipated returns of $100 per month. Even out of the $20, the investors are getting only one cent as the remaining $19.99 is diverted towards growing the network by the Helium Blockchain.
On the other hand, Reddit users are claiming that the company behind Helium is receiving 30 million Helium USD (CCC:HNT-USD) tokens annually. As of July 29, the value of these tokens stood at $300 million. It must be noted that these tokens do not have an end-user demand and are thus used by retail speculators. There are over 124.5 million Helium USD (CCC:HNT-USD) coins in supply currently.
The bearish outlook on cryptocurrencies like Helium USD (CCC:HNT-USD) has also been a cause of concern for famous companies like Tesla, Inc. (NASDAQ:TSLA), Block, Inc. (NYSE:SQ), and NVIDIA Corporation (NASDAQ:NVDA) due to their significant investments in the crypto market.
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Disclose. None. 10 Cryptocurrencies Redditors Will Never Buy Again is originally published on Insider Monkey