Crypto influencer “Coin Bureau” (“@coinbureau” on Twitter) is offering some advice on how not to get burned in the altcoin market.
In a recent YouTube video titled “Tokenomics: Difference Between 100x & Getting REKT!!”, the show’s host told the channel’s 438k+ subscribers that it is important to know the difference between a coin and a token.
“Cryptocurrency coins function more like, well, currencies… Cryptocurrency tokens are a different story. Many tokens have characteristics that make them similar to stocks in a company.”
The pseudonymous trader warned that regulators, such as the U.S. Securities and Exchange Commission (SEC), can flag tokens for operating like securities, leading to potentially hefty fines and the project being shut down.
Coin Bureau also said that he pays close attention to a cryptoasset’s distribution and method for allocation in order to avoid market dumps. He explained the difference between a “fair launch,” such as Bitcoin and a pre-mined asset that allows coins to be allocated to the team and private investors before hitting the market.
The popular trader was bullish on the potential for altcoins to participate in staking, in particular naming ETH 2.0 and DOT as two projects to follow.
“In the case of Ethereum 2.0, any ETH being staked will not be unlocked until 2022 at the earliest. This means that if the price of ETH starts to skyrocket, all that ETH being staked is not going to be making it on to any exchanges. This conveniently restricts the actual circulating supply of ETH which could enhance that positive price action.”
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