Unknown Cryptocurrencies rise in CoinMarketCap rank but you should be wary – OBN


Mindol (MIN) and HedgeTrade (HEDG) are at the forefront of ultra-known projects like NEM (XEM), Dogecoin (DOGE) and Basic Attention (BAT), at least in the CoinMarketcap ranking. What can explain this? What cryptocurrencies are these?

It is noteworthy that the browser Brave Browser,
BAT currency has just reached 10 million frequent users. Dogecoin already
has a number of active addresses and number of transactions close to Bitcoin
Cash

After all,
what are these tokens?

It’s not worth wasting time poring over tokens that don’t have real liquidity. Either way: HedgeTrade is an ERC-20 token that went into circulation earlier this year, has fewer than 500 members in the Telegram group while its Twitter has 1,500 followers, but posts hardly exceed 3 likes.

Mindol is an ERC-20 token that claims to have privately raised $ 42 million in August 2018 with investors in Japan (pre-ICO). Its Telegram group was opened with 1,200 members and remains so today, while Twitter has less than 200 followers.

As
climbed so high in the rankings?

There is not the slightest quality control of the information presented in CoinMarketCap. These projects that have meteoric rises in the ranking do not have minimally serious exchange liquidity, so their quotation can rise 50% with few trades totaling 2 BTCs of real volume or even less.

This volume declared by these exchanges is just a number someone has put in a spreadsheet. By the way, anyone who has read the March 2019 BitWise report on fake volume knows that most, perhaps excluding Binance and HitBTC, don’t even bother to hide the manipulation.

Can you
make money from this?

No. First, the risk of depositing in these
exchanges and losing your money is big. Secondly, even though you
can buy up 20% and the currency goes up 40% on the day, there will be no who
sell. Want to see the concrete evidence?

This is the exchange offer book accounting for an estimated 82% of HedgeTrade (HEDG) volume this Dec 6. To sell a total of $ 1,000 (BTC 0.032) would need to reach up to 0.0000945, or 43% below the last trade.

As
avoid falling into these holes?

Well, the first thing to do is to stop using CoinMarketCap. Some more reliable alternatives are: Nomics: Check the “Transparent Volume” column or through the Messari website: “Real Volume” column.

Avoid using these unknown foreign exchanges as much as possible. While all have an associated risk, Binance, Kraken, Coinbase, Bittrex, and Bitfinex have been robust enough over the last three years that I’ve been following.

Want to take the risk anyway? Go deep, but keep in mind that these “gift books” you see are often filled with market maker purchase orders. This way he can cancel the offer even after you click the “sell” button.


About the author

Marcel Pechman served as a trader for 18 years at UBS, Deutsche and Safra. Since May 2017, he has been conducting arbitration and trading in cryptocurrencies, and co-founding the RadarBTC cryptographic analysis site.

Want to get top news and analysis? Place your email below!



READ SOURCE

READ  Dfinity’s valuation soars to $9.5Bn after revealing its governance system and token economics - TechCrunch

LEAVE A REPLY

Please enter your comment!
Please enter your name here