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What Cryptocurrencies Should I Stay Away From and Why?
Ruby Layram
26th May 2026
Cryptocurrency has drawn millions of new investors over the past few years, attracted by the prospect of significant returns. But alongside the opportunity comes something equally important to understand: not all cryptocurrencies are good investments.
In fact, many crypto projects launched every year end up:
- Crashing in value
- Disappearing completely
- Being abandoned by developers
- Turning out to be scams
That’s why one of the most important skills in crypto investing is learning what not to invest in.
And that’s exactly what we will take a look at in this guide.
Also read: Getting Started in Crypto: A Complete Guide
Why Crypto Can Be Risky
Before we get into specific warning signs, it’s important to understand that cryptocurrency is already a high-risk investment category.
Even major cryptocurrencies can experience huge price swings.
For example:
- Bitcoin has historically experienced multiple 50%+ declines
- Meme coins (like Dogecoin) can collapse overnight
- New tokens can disappear within weeks
That’s why caution and knowledge matter so much.
Unfortunately, the crypto space also attracts:
- Scammers
- Hype-driven speculation
- Pump-and-dump schemes
- Fake projects promising unrealistic returns
So, let’s look at the types of crypto that investors should approach with caution.
1. “Get Rich Quick” Coins
One of the biggest red flags in crypto investing is any coin promising guaranteed wealth or unrealistic returns.
If you see phrases like:
- “100x guaranteed”
- “Next Bitcoin”
- “Turn £100 into £1 million”
- “Risk-free profits”
It’s usually a warning sign.
Legitimate investments do not guarantee massive returns. Many of these projects rely heavily on:
- Hype
- Social media influencers
- Fear of missing out (FOMO)
Rather than genuine long-term value.
In many cases, founding investors profit while later investors are left holding collapsing assets.
2. Meme Coins With No Real Utility
Meme coins have become hugely popular in recent years.
Some of the most famous examples started as internet jokes.
While a few meme coins have generated massive short-term gains, many are:
- Extremely speculative
- Highly volatile
- Driven mainly by hype rather than fundamentals
The biggest risk? Their value often depends entirely on internet attention.
And attention can disappear very quickly.
Thousands of meme coins are launched every year, and many eventually become worthless.
That doesn’t mean every meme coin will fail, but beginners should understand that meme coin investing is often speculation, not investing.
3. Coins That Appear Out of Nowhere
Another major red flag is brand-new coins with:
- No track record
- Anonymous developers
- Little transparency
- No real product or ecosystem
Some projects suddenly trend online because:
- Influencers promote them
- Social media hype explodes
- Communities push aggressive marketing campaigns
But popularity alone does not make a cryptocurrency valuable.
Before investing in any project, it’s worth asking:
- What problem does this coin actually solve?
- Does it have real users?
- Is there long-term demand?
- Who is building it?
If none of those answers are clear, caution is usually sensible.
4. Cryptocurrencies With Weak Fundamentals
In investing, “fundamentals” basically means the underlying strength and usefulness of an asset.
Strong crypto projects often have:
- Active development teams
- Real-world use cases
- Large ecosystems
- Security and transparency
- Long-term adoption potential
Weak projects often rely mainly on:
- Marketing
- Hype
- Celebrity endorsements
- Speculation
If a coin has:
- No clear purpose
- No user growth
- No credible backing
- No development activity
It may struggle long term.
5. Coins With “Too Good to Be True” Staking Rewards
Some projects advertise enormous passive income returns.
For example:
- 50% annual yields
- 100% APY
- “Guaranteed” staking rewards
These offers can sound incredibly tempting.
But extremely high yields are often unsustainable.
In some cases, they rely on:
- New investor money entering the system
- Aggressive token inflation
- Risky financial structures
And when demand slows, the entire system can unravel quickly.
6. Projects With Anonymous or Unverifiable Teams
Some crypto founders choose anonymity for privacy reasons.
However, beginners should still be cautious when:
- No one knows who runs the project
- Team members cannot be verified
- Developers disappear suddenly
- There is little accountability
Transparency matters, especially when money is involved.
7. Coins Driven Purely by Influencer Hype
Social media plays a huge role in crypto markets. But one dangerous trend is influencer-driven investing.
If a cryptocurrency’s popularity depends entirely on:
- TikTok hype
- YouTube personalities
- Celebrity tweets
- Viral marketing
It may be highly unstable.
By the time many ordinary investors hear about these coins:
- Early buyers may already be taking profits
- Prices may already be inflated
- Risk levels may be extremely high
Why Many Beginners Stick to Bitcoin and Ethereum
For newer investors, established cryptocurrencies are often a more cautious starting point, including:
- Bitcoin
- Ethereum
Why? Because compared to smaller crypto projects, they generally have:
- Longer track records
- Larger user bases
- More institutional adoption
- Higher liquidity
- Greater market trust
Bitcoin is often viewed as the most established cryptocurrency, while Ethereum powers huge parts of:
- Decentralised finance (DeFi)
- Smart contracts
- Web3 applications
- Tokenisation
That does not mean they are risk-free.
Crypto remains volatile.
But many investors see established cryptocurrencies as potentially less speculative than unknown altcoins.
How to Think About Crypto Investing More Safely
For beginners, a more cautious approach often makes sense.
That could include:
- Starting small
- Avoiding hype-driven decisions
- Diversifying
- Focusing on established projects
- Investing for the long term rather than chasing quick gains
And perhaps most importantly, never invest money you cannot afford to lose.
Because crypto prices can move dramatically in both directions.
When in doubt, look for cryptoassets listed on platforms registered with the FCA under the UK’s anti-money-laundering regime, this doesn’t give the cryptocurrency itself any particular credence, but it gives you confidence that the firm exchanging them for you is required to meet certain Anti-Money Laundering Requirements.
Exchanges such as CoinJar only list coins that have been carefully vetted, although well-backed, popular tokens have still been known to be abandoned, rug-pulled, or collapse at very short notice, so remember to do your own research.
Final Thoughts
The crypto market offers exciting opportunities, but it also contains significant risks.
Investors should be especially cautious around:
- “Get rich quick” schemes
- High-risk meme coins
- Unknown projects with no fundamentals
- Unsustainable staking rewards
- Influencer-driven hype
For many beginners, sticking to more established cryptocurrencies like Bitcoin and Ethereum may be the more sensible starting point.
Because successful investing is usually less about chasing overnight riches, and more about managing risk sensibly over the long term.
Cryptocurrency is highly volatile and your capital is at risk. This article is for informational purposes only and does not constitute financial advice. Always do your own research before investing in any cryptocurrency.
| Standard Risk Statement |
| The above article is not to be read as investment, legal or tax advice and it takes no account of particular personal or market circumstances; all readers should seek independent investment advice before investing in cryptocurrencies. The article is provided for general information and educational purposes only, no responsibility or liability is accepted for any errors of fact or omission expressed therein. Past performance is not a reliable indicator of future results. |
| UK residents are required (in accordance with local legislation) to complete an appropriateness assessment to show they understand the risks associated with what crypto/investment they are about to buy and enabling CoinJar to categorize them as an investor. New customers are also required under local regulations to wait 24-hours as a “cooling off” period (from account creation), before their account is active (i.e. to deposit, trade, withdraw etc.). |
| Cryptocurrency is currently not regulated in the UK. It’s vital to understand that once your money is in the crypto ecosystem, there are no rules to protect it, unlike with regular investments. You should not expect to be protected if something goes wrong. So, if you make any crypto-related investments, you’re unlikely to have recourse to the Financial Services Compensation Scheme (FSCS) or the Financial Ombudsman Service (FOS) if something goes wrong. |
| Remember: |
| Don’t invest unless you’re prepared to lose all the money you invest. This is a high‑risk investment and you should not expect to be protected if something goes wrong. Take 2 minutes to learn more: www.coinjar.com/uk/risk-summary. |
| If you use a credit card to buy cryptocurrency, you would be putting borrowed money at a risk of loss. We recommend you obtain financial advice before making a decision to use your credit card to purchase cryptoassets or to invest in cryptoassets. |
| Note the standard risk warning from the CoinJar website. |
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