Cryptos you need to AVOID as a Beginner

Cryptocurrency can be confusing for some beginners. They can quickly become overwhelming when you’re trying to find cryptos you need to avoid or which one is the best one to buy. I know that when I started trading cryptocurrencies I didn’t know where to start and so I did a lot of trial and error.

Although you may have heard of forex pairs, cryptocurrency pairs are a whole different story. Unlike forex pairs, which include the US dollar, Euro, etc., there are thousands of cryptocurrencies. Some of the popular ones include Bitcoin, Ethereum, and Litecoin — but these are far from the only ones.

If you’re thinking of just buying one or two crypto pairs, as a beginner in this whole industry, you may want to rethink that strategy and do more research before jumping into it.

Although cryptocurrencies are a fascinating new asset class, not all of them are good investments. Investors in cryptocurrencies are frequently inundated with advice on which cryptocurrency to purchase next before it “goes to the moon.”

Let’s look at some crypto assets that audiences would be safer to stay away from. It might be because it has little use, has dubious value, or is becoming obsolete due to developments in other areas of the crypto world.

Dogecoin (DOGE -14.85%), Bitcoin Cash (BCH -11.54%), and Hex (HEX -12.78%) are three cryptocurrencies to stay away from. (as of August 19, 2022, via coinmarketcap)

1. Dogecoin

Cryptos you need to AVOID - dogecoin

Dogecoin’s staggering drawdown in such a brief period of time proves that investors should steer clear of this meme-inspired dog token, having suffered significant losses over the past 14 months last May 2021, dropping more than 90% from 2021 highs above $0.76.

Dogecoin was established in 2013 by Billy Markus and Jackson Palmer as a lighthearted and entertaining alternative to Bitcoin, the most popular cryptocurrency (CRYPTO: BTC). Dogecoin’s main use to date has been as a tipping mechanism on websites like Reddit and Twitter, whereas Bitcoin, which is gradually being acknowledged as a legitimate store of value, has the longest operating history in the space with a serious developer network and an expanding list of financial infrastructure supporting it.

Despite being listed on the majority of reputable cryptocurrency exchanges and frequently receiving praise from eccentric billionaire and the world’s richest man Elon Musk, Dogecoin has lost over 90% of its value since reaching record highs in May 2021 and is currently trading close to $0.05 with a market cap of just under $7.5 billion.

It is not a wise investment strategy to wait for the crypto community to show renewed interest in order to drive DOGE’s prices up with the goal of generating a quick profit. It’s best to stay away from Dogecoin because of this.

2. Bitcoin Cash

Cryptos you need to AVOID - bitcoin cash

A hard fork from Bitcoin in 2017 led to the creation of Bitcoin Cash. Its original goal was to address some of the drawbacks of Bitcoin, such as high fees and sluggish speeds. However, Bitcoin Cash may become obsolete due to recent advancements in blockchain technology.

The block size is one of the key distinctions between Bitcoin Cash and Bitcoin.

The block sizes of Bitcoin Cash are 32 times bigger than those of Bitcoin. According to this theory, larger blocks can hold more data. As a result of more efficient block sizes, transaction times are shorter and fees are lower.

It would appear that Bitcoin Cash has a benefit at first glance. But in recent years, new technology has made it possible for Bitcoin to catch up to Bitcoin Cash in efficiency without giving up any of the security or decentralization that make Bitcoin special.

This solution, also known as the Lightning Network, makes it possible for Bitcoin transactions to be completed more quickly and affordably. From the main Bitcoin blockchain, the Lightning Network processes transactions in batches.

Consider Bitcoin as a two-lane country road that the Lightning Network has converted into a five-lane highway. Prior to the creation of the Lightning Network, it wasn’t unusual for a Bitcoin transaction fee to exceed the cost of the actual transaction. With Lightning Network, you can now use Bitcoin for regular purchases like your beverage of choice without paying exorbitant fees or experiencing sluggish speeds.

Because of this, the one advantage Bitcoin Cash had over its forerunner may have been eliminated by this new solution. Investors should avoid this cryptocurrency that might be on its last legs rather than wishing that it can overtake Bitcoin in terms of value and popularity.

3. HEX

Cryptos you need to AVOID - HEX

Hex (HEX -10.24%), a coin that is just outside the top 200 tokens in market cap, is receiving a lot of buzz on social media and elsewhere. This is largely attributable to its charismatic founder and aggressive advertising touting the high yields and returns investors can receive by holding Hex.

It compares buying Hex to investing in Bitcoin at $1 and makes bold claims like, “Hex is designed to go up 10,000x in only the first 2.5 years.”

Hex users send Ethereum to something like a wallet address and obtain Hex tokens in exchange. (While it can now be traded on Uniswap, it is noticeably absent from major exchanges such as Coinbase, Gemini, and even Binance.) Users can then invest these tokens in the Hex protocol, where Hex promotes 38% annual returns.

This is said to be a blockchain version of a deposit certificate in which holders are compensated for locking their money away for a set period of time. But even so, the Hex tokens they garner can be created at any time by Hex and are inflationary in nature, providing little utility or revenue generation.

As we’ve learned from numerous projects offering greater returns that have imploded in recent months, high yields are rarely sustainable and should be approached with caution. Hex has fallen from a peak of just under $0.50 in September 2021. Hex, like many fairly small cryptos, may struggle to regain previous peak levels throughout most of the crypto winter.

Here’s Martina’s take on avoiding these kinds of crypto coins, especially those that are part of a crypto pump and dump scheme:

How to Select the Most Profitable Crypto Trading Pairs

After finding out the crypto coins you need to avoid, here’s how you pick the best pairs to trade out there.

All traders enter the market after conducting an in-depth evaluation of a few cryptocurrencies to determine which asset will yield the highest profit. They then conduct a technical analysis of cryptocurrency pairs to better understand market trends and behavior.

A basic and technical analysis, on the other hand, will not allow you to start trading. First, you must select the best trading pair. This may appear simple, but selecting the incorrect trading pair will result in a good profit or even a loss.

First, determine which crypto pairs are popular on most exchanges. There are a lot of orders with the ‘[coin] to USD’ pair. The most popular crypto-to-crypto pairs are, among others, BTC/ETH, BTC/LTC, USDT/BTC, and ETH/LTC.

These pairs are proficient because there is a global demand for cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and others. Traders can quickly find buyers at the appropriate time.

Then, examine the trading volume of various cryptocurrencies and then look for links to other assets. If you don’t want to trade Bitcoin, Ethereum, or Bitcoin Cash, this is the key to finding profitable trading pairs on the market.

READ MORE: Crypto Trading Pairs Explained

Trade’s Liquidity

The primary factor influencing cryptocurrency pair trading is liquidity, and this is how you’re able to quickly sell your crypto assets. The greater the liquidity, the more possibilities to sell the asset on the market you will have. The profit you can make from each trade is then defined by liquidity.

Liquidity refers not only to the speed with which an order can be filled but also to lower risks. You won’t lose money if you always have buyers, and you won’t need to set a low exchange rate to make an asset appealing to buyers.

The liquidity of a cryptocurrency is usually affected by its demand. This is why the best cryptocurrency pairs include BTC, LTC, ETH, USDT, BCH, BNB, and other cryptocurrencies.

Which crypto has the most promising future?

With Bitcoin and Ethereum among the cryptocurrencies with the greatest potential, the world of cryptocurrencies and blockchain technology is here to stay. However, Ethereum is arguably the cryptocurrency with the most promising future for technological advancements due to its distinct features that support smart contracts and decentralized apps.

Choosing the right crypto exchange platform also makes a huge difference. Make sure to select a secure and reputable exchange when buying and selling cryptocurrencies, and take note of ticker symbols.

After reading crypto coins you need to avoid as a beginner, now you are ready to start learning about day trading. Check out Martina’s Learn to Trade & Invest Crypto Academy platform to get access to a complete trading & investing video curriculum, trading resources, our trading community, e-mail support, and 2 Zoom lives with Martina every month. Try it out for 2 weeks 100% FREE!

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