Thousands of cryptocurrencies have sprung up since Bitcoin came to the spotlight back in 2013. Each of these cryptocurrencies claims to be unique in one way or another. Some of them are indeed legitimate and bear potential. Others, however, are ridiculous and some are outright frauds. Unsurprisingly, there are people who still invest in these cryptocurrencies for the oddest of reasons.
So, what pushes us to invest in cryptocurrencies that are not really worth the money (or even the name)?
We don’t know how to distinguish
Cryptocurrencies fall into three categories: investment tokens, utility tokens, and currency tokens. Utility tokens are used to unlock certain features and services from online platforms and specific business brands. Currency tokens function as mediums of exchange just like fiat currencies. Finally, investment tokens function as securities just like stocks and other investment assets.
Of these three categories, the ideal one to invest your money in the best one is investment tokens, as they promise greater ROI. However, any cryptocurrency can qualify as an investment token as long as its value is expected to appreciate over time. This, however, is difficult to ascertain for most crypto investors.
We don’t conduct enough research
Smart, reputable investors take their time before deciding to invest in any asset because they place great emphasis on research. Before investing, these investors scrutinize security assets in every possible way to be sure that chances of rewards outdo risks.
Research is integral in any investment. It is especially important for cryptocurrency investors as cryptos have exceptionally high volatility levels – in fact, these high volatility levels have deterred even the best prospective investors and seen some label cryptocurrencies as a scam. You should also remember that the market is still relatively new and still struggling to find its footing. Unfortunately, most crypto investors do not take the time to examine their desired cryptocurrencies and the results of their investments hardly ever reflect their expectations.
We are swayed by the markets
At its peak, the entire cryptocurrency market was worth over USD 800 billion. The markets have since lost about 80% of their entire capitalization and are currently worth about USD 130 billion. This figure is still incredible considering the short period cryptocurrencies have been around. What is even more incredible is the pace at which ICOs (Initial Coin Offerings) are taking off – some ICOs like e.g. Telegram, a popular messaging app, have raised billions of dollars.
Millions of people pour billions of dollars into cryptocurrencies every other day, so why shouldn’t you, right? This is the mentality of a majority of cryptocurrency investors. They tend to think that the markets are safe because other people are investing in them. Unfortunately, this is a classic case of a blind person leading another – it is a vicious cycle of bizarre crypto investments.
We are greedy
One BTC sold for pennies back in 2009. Fast-forward nine years later, and BTC prices have soared to an all-time high of over USD 19,000. Interestingly, many people dismissed Bitcoin as a scam back in 2009 and it was not until 2013 that the crypto found its footing. Some people chose to take the risk and invest in BTC while others opted to bind their time. The latter are the very same people who bought into BTC when it was selling for thousands of dollars expecting that its value would maintain the upward trajectory. These investors were influenced by greed rather than logic and reason.
Cryptos are the talk of the town and there are numerous stories of people who have made millions and even billions of them. This arouses greed among late investors, and it pushes them to make bizarre investments in hopes that they too can get a share of the pie.
Examples of truly bizarre cryptocurrency investments
So, which are the most bizarre cryptocurrencies that have managed to attract investors? We are spoilt for choice, but the following stand out the most:
Dogecoin takes the crown of bizarre crypto investments for several reasons. For starters, Dogecoin was originally issued as a joke currency by two American IT experts: Jackson Palmer and Billy Markus. It was inspired by the popular Shiba Inu meme that featured a grammatically-incorrect caption. Initially, Dogecoin was used to reward online users for sharing funny and interesting content. It wasn’t worth much.
The reason why Dogecoin is the most bizarre crypto is its market capitalization value. The crypto saw its market capitalization rise to over USD 2 billion at the height of the cryptocurrency craze back in 2017. Most of the people who invested in it probably didn’t even know its initial utility. The coin is now worth about USD 600 million, which is still incredible considering it was a ‘joke’ coin.
TrumpCoin (and more)
Trump has his very own cryptocurrency: TrumpCoin. This crypto was developed by Trump supporters and American nationalists. It proposes to bring other Trump supporters and nationalists together to help the Trump administration achieve its goals. Its developers urge their supporters to buy TrumpCoin and donate to noble courses that include securing the border, taking care of veterans, and building better infrastructure.
Interestingly, Trump is not the only politician to have cryptocurrency named after him. Putin, the next big contender has not one but two cryptocurrencies: PutinCoin and Putin Classic. Others including Ron Paul and Hillary Clinton also have cryptos named after them.
MMM Coin is an outright fraud that has nevertheless managed to attract investors and raised millions in the process. This crypto is an offshoot of MMM, an earlier form of alternative currency developed in Russia back in the 1990s. Its developer, Sergei Mavrodi, promised investors annual returns of at least 1000%. Mr. Mavrodi was very elaborate in his marketing schemes – MMM was advertised on TV stations across Russia is ads that resembled soap operas featuring an ordinary Russian guy who keeps getting richer and richer off MMM.
MMM dies shortly after its birth, but it has made a comeback in the form of cryptocurrency. The new MMM coin is still built on Mr. Mavrodi’s ideas. To this end, it is just as bizarre and fraudulent as its 90s version.