Why Penny Cryptos are Lethal when trading
Why Penny Cryptos are lethal with Trading!
We saw how insanely unstable crypto currencies were recently.
We saw crashing markets, leaders that had very bad risk and business management strategies.
We saw huge jumps and even top cryptos crashing to zero (cough Luna).
And when it comes to Penny Crypto Currencies they are even MORE lethal and dangerous.
What Penny Cryptos are…
Penny cryptocurrencies are digital coins that have low market capitalization.
They are traded for a few cents or less.
These are the ones that seem to be attractive to most amateur and greedy driven traders.
The price is low and they believe they’ll jump up 10,000%.
But the chances of you nailing even one of these countless Penny Cryptos are slim to none.
Here are some reasons why:
Reason #1: Huge Volatility
Penny cryptocurrencies are notorious for their high volatility. This means they jump a huge percentage at erratic and sporadic periods of the day.
They can experience wild price swings in a matter of minutes or hours, making them difficult to trade.
Investors who buy penny cryptocurrencies are often driven by the hope of making quick profits, but these price swings can result in massive losses just as easily.
Reason #2: Issued by Small Companies That Aren’t Professional
Penny cryptocurrencies are often issued by small companies that lack the professionalism and expertise to develop and market their digital assets effectively.
Their money management and risk management options and skills are very poor which can lead them going to jail. This wipes away people’s hard earned money.
They may also lack the resources to build secure platforms for trading, which exposes investors to significant cybersecurity risks.
Reason #3: Highly Likely to be Scams and Fraud
The low price of penny cryptocurrencies also makes them a prime target for scams and fraud.
It is common for fraudsters to promote these assets as the next big thing, only to disappear with investors’ money once they have accumulated a sufficient following. Did you know you can create a Penny Crypto on Fiverr for less than $20! You can literally make a coin in your name if you wanted to.
Reason #4: Low Liquidity and Low Volume Traded
There’s also very little volume traded with these coins.
This means that there may not be enough buyers or sellers in the market.
This makes it difficult to execute trades or sell positions.
As a result, investors may be stuck holding onto penny cryptocurrencies for an extended period, which exposes them to significant price risks.
Talking about price risks…
Reason #5: More Likely for the Price to Head to Zero
There’s a higher chance and probability that these Penny Cryptos end up to be worthless.
Many of these digital assets lack the utility and functionality that makes other cryptocurrencies valuable. Also, some are backed by nothing but a name and demand and supply of the members.
As a result, investors who buy penny cryptocurrencies are taking on a significant risk that the price may head to zero, resulting in a total loss of their investment.
I don’t mean to scare you. Actually I do!
Just like the way most Penny shares, Pink Sheets and sh$# coins act and have acted for the last hundred years, there is no exception with Penny Cryptos.
I would stay away or if I really thought of risking money in these, I would only invest with money I could literally cut up and write off…
Do you agree? Let me know your thoughts.
Trade well, live free.
Founder, MATI Trader
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