Influencers are popular figures who have amassed a devoted social media following that usually pays attention to what they say on particular subjects, such as cryptocurrencies. While cryptocurrency influencers can provide insights and opinions that may be valuable for investors, blind trust in their advice can be detrimental to your financial well-being.
So, why shouldn’t you trust crypto influencers?
1. They Are Usually Paid to Say What You Want to Hear
Crypto developers sponsor crypto influencers and give them juicy compensation for promoting their projects. They pay influencers to say what they want you to hear, whether true or not. So, that they say they invested lots of money into a coin or project does not guarantee it will yield much return.
These influencers with little to no knowledge about crypto are usually given a script on what to say about a cryptocurrency they want you to invest in.
Crypto influencers are known for hyping (crypto shilling) new and speculative assets, often highlighting the prospects of significant returns and painting a rosy picture of the asset’s potential.
While crypto influencers may appear enthusiastic promoters of various cryptocurrencies, it is important to recognize that their endorsement does not necessarily reflect their personal investment choices.
As mentioned, they are paid to promote certain aspects rather than personally invest in them.
Some crypto influencers engage in crypto pump-and-dump schemes, where they use social media to promote interest in an altcoin, token, or coin that has no real and immediate purpose to their followers.
By creating a buzz around the asset, its price is artificially inflated. Once the price has increased, they sell their holdings, causing the asset to collapse and leaving their followers with losses.
The misleading advice to purchase these coins, which often ends up plummeting, shows why information from crypto influencers is unreliable and should not be trusted.
4. They Aren’t Typically Crypto or Finance Experts
Crypto influencers might not possess the knowledge or research skills to offer accurate information. Their content focuses on short-term market movements, quick trades, and immediate profit opportunities.
They do not spare the time to research the risks associated with buying a particular coin at a particular time. Cryptocurrencies are highly volatile and unpredictable; even crypto experts may not always get it right.
Crypto influencers are not licensed to give financial advice. Hence, any crypto offering that promises a hundred percent guaranteed returns is definitely a red flag. They might have made money from crypto, but that does not make them crypto experts.
5. Scammers Can Pose as Crypto Influencers
The crypto space is unregulated, making it easy for anyone to pose as a crypto influencer or expert without formal qualifications. Social media platforms like YouTube and Twitter have several self-acclaimed crypto experts dishing out crypto content.
These scammers go as far as making sponsored posts with promises of guaranteed returns. They may claim insider information, secret strategies, or exclusive access to particular projects.
For example, they may offer you a free giveaway, a private group, a trading course, or a referral link. They may entice you to participate in airdrops, ICOs, or presales requiring you to send funds to an unknown address or provide your private keys. These are all scams that aim to steal your money or identity.
6. You Cannot Hold Them Accountable
Influencers cannot be held responsible when investment outcomes take a negative turn. Their analysis and predictions are primarily based on subjective opinions rather than fundamental research.
The fact that they are not licensed to give financial advice, which is often implied through disclaimers in their content, means that they are not legally obligated to account for losses incurred by their followers.
Relying on their advice is at your own risk.
6 Places to Get Crypto Investment Information or Advice
We must emphasize that exploring multiple sources and conducting your own research is essential when looking for cryptocurrency investment information or guidance.
We’ve highlighted some places you can get crypto investment information and advice.
1. Reliable Crypto Exchanges
Crypto exchanges are platforms you buy, sell, and trade cryptocurrencies or perform transactions with other users.
Some centralized crypto exchanges like Binance provide educational resources to help you learn more about the crypto market, such as market data, charts, news, analysis, webinars, etc.
2. Credible Crypto News Sites and Investment Blogs
It is easier to make informed investment decisions by reading, listening to, or watching the latest news, analysis, and market trends in the cryptocurrency space.
News sites provide up-to-date reports on the latest news, while crypto-focused blogs and financial news platforms offer valuable insights on investment strategies shared by experts and enthusiasts, as well as information about upcoming events, market updates, regulatory changes, and new project launches.
3. Crypto Forums With Experienced Investors
Forums serve as a good source of information. And although there are many online communities where people discuss cryptocurrency, you should always visit the best crypto forums.
When part of a crypto forum, you can listen and learn from well-seasoned and experienced crypto experts and other investors about market trends in the crypto space.
4. Crypto Podcasts
Listening to crypto podcasts is an excellent way of improving your crypto knowledge by learning about the fundamentals, strategies, tools, and best crypto trading and investing practices. To help you learn more about it, we’ve listed some of the best crypto podcasts you should tune in to.
Furthermore, you can watch and listen to interviews and discussions with experts and knowledgeable individuals who delve into several crypto projects and investment opportunities.
5. Official Project Websites and White Papers
When researching a particular cryptocurrency, you should visit a project’s official website to get essential information about the project’s goals, team members, technology, partnerships, and other relevant details.
Reading their white papers will give you a comprehensive knowledge of the project’s objectives and potential. Furthermore, you can determine whether the project aligns with your investment goals, risk tolerance, and overall strategy.
6. Social Trading Platforms
Social trading platforms are online platforms that allow you to interact with other investors like you, share their trading strategies, follow their performance, and copy their trades.
You can follow and learn from experienced traders with a proven track record of success in the crypto market. You can see their portfolio, trading history, risk profile, and trading style. You can also ask them questions and get feedback on your trades. However, you shouldn’t just use any social trading platform. Instead, use one of the best crypto social trading platforms that offer protection, automation, and other features.
Never Blindly Trust Crypto Influencers
While crypto influencers offer valuable insight, you should remember that not all crypto influencers are investors. You should never mindlessly trust any influencer but exercise caution and verify the information.
Do not buy into hype for fear of missing out. Instead, do your research, follow actual crypto experts, and understand the crypto terrain before investing in it.
Credit: Source link
