Analysts at consulting giant The Motley Fool have warned investors. Accordingly, it is possible for 2 altcoin projects to witness major declines in the future. For this reason, analysts say it makes sense for investors to stay away from these cryptocurrencies.
2 altcoins to avoid
Cryptocurrencies are an exciting emerging asset class. However, not every cryptocurrency is a lucrative purchase. Crypto investors are constantly bombarded with information about which cryptocurrency to buy before they “go to the moon.” In this context, The Motley Fool analysts announced 2 altcoin projects that should be avoided. Stay away advice may be due to lack of utility, questionable value, or project obsolescence. The cryptocurrencies mentioned are Bitcoin Cash and Hex, which most people know. Now let’s take a look at why Motley Fool analysts made this warning. As Kriptokoin.com, we have compiled it for you.
Bitcoin Cash (BCH)
Bitcoin Cash emerged as a result of a hard fork of Bitcoin in 2017. Its original purpose was to fix some of Bitcoin’s shortcomings, such as high fees and slow speeds. However, innovations in Blockchain technology have made Bitcoin Cash potentially obsolete. One of the main differences between Bitcoin Cash and Bitcoin comes in the block size. The block sizes of the Altcoin project are 32 times larger than Bitcoin. The thinking is that larger blocks can hold more data. Additionally, transaction speeds are faster and fees are lower as block sizes are more efficient. At first glance, these seem like Bitcoin Cash has an advantage. But in recent years, new technology has allowed Bitcoin to become as efficient as Bitcoin Cash without compromising the security and decentralization that makes it unique.
BTC does this with a solution called the Lightning Network. Lightning helps make Bitcoin transactions faster and cheaper. The Lightning Network currently processes transactions separately and collectively from the Bitcoin Blockchain. The token has grown over 300% over the past year. It has also made integrations with mobile apps like CashApp, Strike and even Twitter. Thus, it increased its user base. As a result, it’s possible that this new solution has ended the single use case of Bitcoin Cash. According to the Montley Fool analyst, it is unreasonable to hope that the altcoin project can catch up with Bitcoin in popularity and value. Instead, it’s better to stay away from it. Bitcoin Cash was changing hands at $126.15, down 0.28% on the day at the time of writing.
Hex (HEX)
By market cap, Hex is an altcoin project just outside the top 200 tokens. It’s getting a lot of attention, especially on social media and beyond. This popularity is largely due to its charismatic founder. It is also thanks to its extensive advertisements praising the high returns that investors can get by holding Hex. “Hex is designed to increase 10,000 times in just the first 2.5 years,” the ad says. He compares such bold claims to investing $1 in Bitcoin. The analyst says he is cautious about the Hex website stating that it is “like Bitcoin but better.” Hex users essentially send Ethereum to a wallet address and receive Hex tokens in return. They can then lock these tokens on the Hex Blockchain. Accordingly, Hex declares that staking assets yields an average return of 38% per year.
This allegedly looks like a Blockchain version of a deposit deal where holders are paid to lock up their money for a period of time. However, the Hex assets they earn can be created by Hex at any time. So altcoin is inflationary in nature. Accordingly, it offers little in the way of utility or income generation. The analyst says he does not like investors sending their Ether to an unknown wallet. He then warns investors: “High-yield projects like this are often not sustainable and need attention.” Hex is trading well below the $0.50 ATH it hit in September 2021. Today, the token’s value is only $0.042. Adding to these concerns is the simple question of opportunity cost. In the current market environment, investors can accumulate blue-chip cryptos like Bitcoin or Ethereum at a high discount.
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