Crypto Basics

What are Altcoins? - The Ultimate Guide for Beginners

Discover everything about Altcoins in this comprehensive guide. Learn what Altcoins are and how they can diversify your crypto portfolio.
Token Metrics Team
10 Minutes
MIN

In the world of cryptocurrencies, altcoins have emerged as a popular alternative to Bitcoin. While Bitcoin remains the most well-known cryptocurrency, altcoins offer a diverse range of digital assets with unique features and functionalities. 

This comprehensive beginner's guide aims to provide you with a clear understanding of what altcoins are, their purpose, and how they differ from Bitcoin.

What are Altcoins?

Altcoins, short for "alternative coins," refer to all cryptocurrencies other than Bitcoin. While Bitcoin paved the way for the development of digital currencies, altcoins have gained momentum in recent years.

Altcoins are built on various blockchain technologies and aim to address different use cases, ranging from decentralized finance (DeFi) to smart contracts and privacy features.

Types of Altcoins

Here is the list of different types of altcoins, their features, and their impact on the crypto ecosystem.

Stablecoins - Stablecoins are a type of altcoin that aim to maintain a stable value by pegging their price to an external asset such as fiat currency or commodities. 

These cryptocurrencies provide stability in the volatile crypto market, making them suitable for various purposes such as remittances, decentralized finance (DeFi) transactions, and as a hedge against market volatility.

Privacy Coins - Privacy coins prioritize user anonymity and transaction privacy. They utilize advanced cryptographic techniques to conceal transaction details and protect the identities of the participants involved.

Privacy coins offer enhanced privacy features compared to other cryptocurrencies, allowing users to have greater control over their financial information.

Utility Tokens - Utility tokens are a type of altcoin that serve a specific purpose within a blockchain ecosystem. They are typically used to access or pay for services within a decentralized platform. 

Utility tokens can represent ownership rights, access rights, or provide discounts and incentives to users within the network.

Security Tokens - Security tokens are digital assets that represent ownership or investment in a real-world asset, such as shares in a company, real estate, or commodities.

These tokens are subject to regulatory compliance and offer investors the benefits of traditional securities while leveraging blockchain technology for enhanced transparency, liquidity, and efficiency.

Exchange Tokens - Exchange tokens, also known as native tokens, are the primary currency within a particular blockchain or decentralized exchange.

They facilitate transactions, pay for transaction fees, and serve as a means of value transfer within the ecosystem. Exchange tokens often have additional functionalities within the platform, such as voting rights or governance participation.

Governance Tokens - Governance tokens grant holders the right to participate in the decision-making processes of a decentralized platform or protocol.

These tokens enable holders to vote on proposals, make suggestions, or influence the development and direction of the project. Governance tokens play a vital role in decentralized governance models, ensuring community-driven decision-making.

Gaming Tokens - Gaming tokens are designed specifically for the gaming industry. These tokens enable in-game purchases, rewards, and other interactions within gaming ecosystems.

By utilizing blockchain technology, gaming tokens provide players with true ownership of in-game assets and enable peer-to-peer trading of virtual items.

NFT-Backed Tokens - NFT-backed tokens represent non-fungible tokens that are backed by another cryptocurrency or token. 

These tokens combine the unique properties of NFTs with the benefits of other cryptocurrencies, allowing for increased liquidity and tradability of non-fungible assets.

Energy-Efficient Coins - Energy-efficient coins address the environmental concerns associated with traditional proof-of-work (PoW) cryptocurrencies like Bitcoin. 

These altcoins utilize alternative consensus mechanisms, such as proof-of-stake (PoS) or delegated proof-of-stake (DPoS), which require significantly less energy consumption while maintaining the security and integrity of the blockchain.

Proof-of-Stake Coins - Proof-of-stake coins rely on the concept of staking to secure the network and validate transactions. Validators are chosen based on the number of coins they hold and are willing to "stake" as collateral.

This consensus mechanism offers energy efficiency, scalability, and reduced centralization concerns compared to proof-of-work systems.

Proof-of-Work Coins - Proof-of-work coins, like Bitcoin, secure their networks through miners who solve complex mathematical puzzles to validate transactions.

This mechanism requires substantial computational power and energy consumption. Proof-of-work coins have been the foundation of the crypto industry and have demonstrated the potential of decentralized systems.

Forked Coins - Forked coins are altcoins that have emerged from a fork in the blockchain network. Forks occur when there is a fundamental disagreement within the community or development team, resulting in a split into two separate chains. 

Forked coins can retain the existing features of the parent blockchain or introduce new functionalities.

Cross-Chain Tokens - Cross-chain tokens, or interoperable tokens, enable value transfer between different blockchain networks. These tokens facilitate cross-chain communication, allowing assets to be transferred seamlessly across multiple platforms. 

Cross-chain tokens play a crucial role in bridging the gap between various blockchain ecosystems, enhancing interoperability and expanding the possibilities of decentralized applications.

List of Top Altcoins

The cryptocurrency market boasts a wide array of altcoins, each with its unique features and value propositions. Here are some of the most popular altcoins:

1 Ethereum (ETH) - Ethereum is a decentralized platform that enables the creation of smart contracts and DApps. It introduced the concept of programmable blockchain, allowing developers to build applications on its network.

2 Ripple (XRP) - Ripple is both a digital payment protocol and a cryptocurrency. It aims to facilitate fast, low-cost international money transfers and has gained significant traction among financial institutions.

3 Litecoin (LTC) - Litecoin, often referred to as the silver to Bitcoin's gold, was created to provide faster transaction confirmations and a more efficient mining process. It shares many similarities with Bitcoin but with a few notable differences.

4 Cardano (ADA) - Cardano is a blockchain platform that focuses on security, sustainability, and scalability. It aims to provide a framework for the development of decentralized applications and smart contracts.

These are just a few examples of the vast number of altcoins available in the market. Each altcoin has its unique features, community, and use case, making the cryptocurrency landscape diverse and dynamic.

Advantages and Disadvantages

Here are the advantages and disadvantages of altcoins:

Advantages of Altcoins

Diversification Opportunities

Altcoins provide investors with the chance to diversify their cryptocurrency portfolio. By investing in different projects, technologies, and use cases, one can mitigate risks and capitalize on emerging trends.

Technological Progress:

Altcoins often introduce groundbreaking technological advancements in the realm of digital currencies. Ethereum, for example, pioneered smart contracts, revolutionizing industries like finance and supply chain management.

Potential for Lucrative Returns:

Early investment in altcoins offers the potential for substantial returns over time. However, it is important to conduct thorough research and exercise caution due to the associated risks and potential for fraudulent projects.

Enhanced Privacy and Security:

Certain altcoins prioritize privacy and security through advanced cryptographic techniques. Users can enjoy increased anonymity and confidentiality during transactions, providing an alternative to traditional financial systems.

Disadvantages of Altcoins

Volatility and Market Uncertainty:

Altcoins are known for their inherent volatility, resulting in significant price fluctuations within short periods. While this volatility presents opportunities for gains, it also carries higher risks of losses.

Limited Acceptance and Adoption:

Altcoins generally face lower levels of acceptance and adoption compared to Bitcoin. Bitcoin's widespread recognition and dominance make it the preferred cryptocurrency for most users and businesses.

Potential for Scams and Fraud:

The proliferation of altcoins has led to numerous scams and fraudulent projects. Caution and thorough research are necessary to avoid falling victim to scams, such as pump-and-dump schemes or fake ICOs.

Regulatory and Legal Uncertainty:

Altcoins often operate in a regulatory gray area, with undefined legal statuses. Changes in regulations or crackdowns on cryptocurrency-related activities can significantly impact the value and viability of altcoins.

Bitcoin vs Altcoin

Although altcoins share similarities with Bitcoin, they have distinct characteristics that set them apart. Bitcoin was the first decentralized digital currency, introduced by an anonymous individual or group known as Satoshi Nakamoto. 

It operates on the Bitcoin blockchain and focuses primarily on peer-to-peer transactions and the store of value.

On the other hand, altcoins have diverse features and functionalities. Some altcoins, like Ethereum, enable the creation of decentralized applications (DApps) and smart contracts.

Others, such as Litecoin and Bitcoin Cash, prioritize faster transaction speeds and lower fees. Altcoins often aim to improve upon Bitcoin's limitations and explore new possibilities in the crypto space.

Should you consider investing in Altcoins?

Investing in altcoins can be an exciting opportunity for individuals looking to diversify their investment portfolios. However, it's essential to approach altcoin investments with caution and conduct thorough research. Here are a few key points to consider before investing in altcoins:

Conduct research: Understand the altcoin's technology, team, roadmap, and potential use cases. Look for reputable sources of information and evaluate the project's viability.

Risk assessment: Assess the risks associated with the altcoin investment. Consider factors such as market volatility, regulatory challenges, and potential security vulnerabilities.

Diversification: Spread your investments across different altcoins to minimize risk. Investing in a diverse range of projects can increase your chances of finding successful investments.

Set a budget: Determine the amount of money you are willing to invest in altcoins. Set a budget that you can afford to lose without affecting your financial stability.

Choose a reliable exchange: Select a reputable cryptocurrency exchange to buy and trade altcoins. Ensure that the exchange has a good track record, strong security measures, and a user-friendly interface.

Risks and Challenges of Altcoin Investments

While altcoin investments offer opportunities, they also come with risks and challenges. Some of the risks include:

Volatility: Altcoin prices can experience significant fluctuations, leading to potential losses if not managed properly.

Regulatory uncertainty: The regulatory landscape for cryptocurrencies is still evolving, and changes in regulations can impact the value and viability of altcoins.

Security vulnerabilities: Altcoins may be susceptible to hacking, scams, or technical vulnerabilities, which can result in the loss of funds.

It's essential to stay informed, exercise caution, and conduct due diligence before investing in altcoins.

Future of Altcoin Development

The world of altcoins continues to evolve rapidly, with ongoing developments and innovations. Here are some future trends to watch out for:

Interoperability: Projects focusing on interoperability aim to enhance communication and compatibility between different blockchains, enabling seamless transfer of assets and data.

Privacy-focused altcoins: With growing concerns about privacy, there is an increasing demand for altcoins that prioritize anonymity and data protection.

Decentralized Finance (DeFi): Altcoins supporting decentralized financial applications, such as lending, borrowing, and automated market-making, are gaining popularity as they offer alternatives to traditional financial systems.

As technology advances and new challenges arise, the altcoin landscape is expected to witness further growth and diversification.

Frequently Asked Questions

Q1. Are altcoins as secure as Bitcoin?

The security of altcoins varies depending on the specific project and its underlying technology. It's crucial to research and understand the security measures implemented by each altcoin.

Q2. How can I choose the right altcoin to invest in?

Choosing the right altcoin requires thorough research and analysis. Consider factors such as the project's team, technology, use case, and market demand.

Q3. What is the future outlook for altcoins?

The future of altcoins is promising, with ongoing developments in areas such as interoperability, privacy, and decentralized finance. However, it's important to approach investments with caution and stay informed about market trends.

Q4. Can I use altcoins for everyday transactions?

Some altcoins are designed for use as digital currencies and can be used for everyday transactions. However, acceptance and adoption may vary depending on the altcoin and the merchants or platforms that support it.

Conclusion

Altcoins provide a diverse and dynamic ecosystem within the cryptocurrency market. They offer unique features and functionalities that differentiate them from Bitcoin. 

However, investing in altcoins requires thorough research, risk assessment, and cautious decision-making. Stay informed, diversify your portfolio, and set realistic expectations for returns. 

Remember to choose reputable wallets and exchanges to ensure the security of your altcoin investments. As the altcoin market continues to evolve, it is essential to stay updated with the latest trends and developments.

Disclaimer

The information provided on this website does not constitute investment advice, financial advice, trading advice, or any other sort of advice and you should not treat any of the website's content as such.

Token Metrics does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.

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How Do I Keep My Cryptocurrency Safe?

Token Metrics Team
8 min
MIN

The cryptocurrency market has created life-changing wealth for millions, but it has also attracted hackers, scammers, and bad actors. From exchange hacks to phishing scams and rug pulls, billions of dollars in crypto have been lost due to poor security practices.

If you’re serious about trading or investing in crypto, one of your top priorities should be keeping your cryptocurrency safe. In this guide, we’ll walk through the biggest risks to your crypto security, best practices to protect your assets, and how Token Metrics can help you make informed, safe decisions when navigating the crypto market.

Why Is Cryptocurrency Security So Important?

Unlike a traditional bank account, cryptocurrency transactions are irreversible. If your funds are stolen, there’s usually no way to recover them.

  • No centralized authority: There’s no bank to call for refunds.
  • Pseudonymous transactions: It’s nearly impossible to trace funds once they’re moved.
  • High-value targets: Hackers actively target crypto investors due to the potential for large payoffs.

This means you are your own bank—and you’re responsible for protecting your funds.

Common Threats to Your Cryptocurrency

Before learning how to protect your crypto, you need to know what you’re up against:

1. Exchange Hacks

Crypto exchanges are frequent targets for hackers. Even top-tier exchanges like Mt. Gox and FTX have experienced devastating losses.

2. Phishing Attacks

Scammers use fake websites, emails, or social media accounts to trick you into revealing your private keys or login credentials.

3. Malware & Keyloggers

Cybercriminals install malicious software on your devices to steal passwords and seed phrases.

4. Rug Pulls & Scams

Fraudulent projects lure investors with promises of high returns, then disappear with the funds.

5. Human Error

Lost passwords, mishandled private keys, or accidental transfers can lead to permanent loss of funds.

How to Keep Your Cryptocurrency Safe

Here’s a step-by-step approach to safeguarding your crypto:

1. Use a Secure Wallet

Hardware Wallets:

  • The safest option for long-term storage.
  • Devices like Ledger or Trezor keep your private keys offline, out of reach of hackers.

Software Wallets:

  • Convenient for active trading but more vulnerable to attacks.
  • Use reputable wallets like MetaMask or Trust Wallet and enable strong security features.

Pro Tip: Use a hardware wallet for long-term holdings and a software wallet for small, active trading balances.

2. Enable Two-Factor Authentication (2FA)

Always enable 2FA on your exchange accounts, wallets, and email addresses.

  • Use Google Authenticator or Authy, not SMS-based 2FA, which is susceptible to SIM swaps.

3. Beware of Phishing & Fake Websites

  • Double-check URLs before logging into exchanges or wallets.
  • Never click links from suspicious emails or DMs.
  • Bookmark the official websites of your exchanges and platforms.

4. Keep Your Seed Phrase Offline

Your wallet’s seed phrase is the master key to your funds.

  • Write it down on paper and store it securely (safe, vault).
  • Avoid storing it in digital form (cloud storage, photos).
  • Consider splitting the phrase into parts and storing them in separate locations.

5. Research Projects Before Investing

Many scams and rug pulls target uninformed investors chasing hype.

How Token Metrics Helps:

  • Use AI-powered Investor Grades to assess projects for long-term viability.
  • Leverage Moonshot Finder to discover vetted early-stage tokens with real growth potential—not scams.

6. Diversify Your Storage

Don’t keep all your crypto in one place.

  • Use multiple wallets for different purposes (trading vs. holding).
  • Spread funds across hardware, software, and exchange wallets.

7. Stay Updated on Threats

The crypto landscape changes fast.

  • Follow credible crypto news platforms.
  • Monitor regulatory updates and security alerts.
  • Use Token Metrics to stay ahead of market narratives and avoid projects flagged as high-risk.

How Token Metrics Helps You Stay Secure

While Token Metrics isn’t a wallet or exchange, it’s a powerful AI-powered platform designed to help you make safer investment decisions.

1. AI-Powered Risk Analysis

Token Metrics uses AI-driven evaluations to score projects, helping you avoid high-risk tokens and scam projects.

2. Investor & Trader Grades

Our proprietary grading system helps you quickly identify safe, high-quality assets for both short-term trading and long-term holding.

3. Moonshot Finder

Interested in low-cap tokens? The Moonshot Finder helps you spot legitimate early-stage projects before they pump—without falling into scams.

4. Narrative & Market Tracking

Stay ahead of emerging narratives and security concerns with Token Metrics’ real-time AI-driven analysis, helping you dodge risky trends.

Practical Security Checklist for Every Crypto Holder

  1. Use a hardware wallet for long-term holdings.
  2. Enable 2FA on all accounts—never rely on SMS-based security.
  3. Store seed phrases offline and securely.
  4. Avoid suspicious links and verify all URLs.
  5. Research every project using platforms like Token Metrics.
  6. Diversify storage across multiple wallets.
  7. Stay informed about new threats and market risks.

Final Thoughts

So, how do you keep your cryptocurrency safe? It comes down to strong storage practices, personal vigilance, and making informed investment decisions.

While hardware wallets and 2FA secure your assets, knowing where to invest is just as important. That’s where Token Metrics comes in—using AI-powered analysis to help you avoid scams, choose safe projects, and trade with confidence.

In crypto, you are your own bank—so take your security seriously. And with Token Metrics guiding your decisions, you can navigate this high-risk market safely and profitably.

Research

What Are Trading Fees and How Do They Work?

Token Metrics Team
8 min
MIN

If you’ve ever bought or sold cryptocurrency, you’ve likely noticed that exchanges charge trading fees. While these fees may seem small at first glance, they can add up significantly over time, especially for frequent traders.

Understanding how trading fees work is essential for maximizing your profits and choosing the right platform and strategy. In this guide, we’ll explain what trading fees are, how they’re calculated, the different types of fees, and how Token Metrics can help you minimize costs while optimizing your trades.

What Are Trading Fees?

Trading fees are charges imposed by cryptocurrency exchanges whenever you execute a trade—whether you’re buying, selling, or swapping digital assets.

  • Purpose:

    • They compensate exchanges for providing liquidity, security, and order-matching services.
    • They discourage spam orders that could overload the exchange.

Example:
If you buy $1,000 worth of Bitcoin with a 0.1% trading fee, you’ll pay $1 in fees for that transaction.

How Are Trading Fees Calculated?

Most crypto exchanges calculate fees based on:

  1. Trade Value (Percentage):

    • The most common model.
    • Fees are a percentage of the total trade amount (e.g., 0.1% per trade).

  2. Flat Fees:

    • Some platforms charge a fixed fee per trade, regardless of trade size.

  3. Tiered Fee Structures:

    • Frequent traders often benefit from lower fees when they reach certain monthly trading volumes.

Maker vs. Taker Fees

Many exchanges use a maker-taker model to incentivize liquidity:

  • Maker Fees:

    • You pay a lower fee (or sometimes nothing) when you add liquidity by placing a limit order that isn’t immediately matched.

  • Taker Fees:

    • You pay a higher fee when you remove liquidity by placing a market order that is filled instantly.

Example:
On Binance, makers might pay 0.08%, while takers pay 0.1%.

Types of Crypto Trading Fees

When trading crypto, you’ll encounter more than just trading fees:

1. Trading (Transaction) Fees

  • Charged when buying or selling crypto.
  • Often range from 0.05%–0.5% depending on the exchange.

2. Deposit Fees

  • Some exchanges charge when funding accounts via credit card, PayPal, or bank transfers.
  • Crypto deposits are typically free.

3. Withdrawal Fees

  • Charged when moving funds off the exchange.
  • Often fixed per withdrawal (e.g., 0.0005 BTC).

4. Network (Gas) Fees

  • Separate from exchange fees, paid to blockchain validators.
  • Ethereum and other networks can have high gas fees during peak demand.

Why Do Trading Fees Matter?

Even small fees can significantly impact your profits, especially if you trade often.

Example:

  • A day trader making 50 trades/month with a 0.1% fee per trade on $1,000 positions will pay $50/month in fees.
  • Over a year, that’s $600 lost to fees—before considering withdrawal or gas costs.

This is why reducing fees is crucial for active traders.

How to Minimize Trading Fees

1. Use Low-Fee Exchanges

Compare platforms—Binance, Bybit, and Kraken often offer competitive rates for high-volume traders.

2. Increase Your Trading Volume

Many exchanges lower fees as your monthly trading volume increases.

3. Use Limit Orders

Save on fees by acting as a maker instead of a taker whenever possible.

4. Pay with Exchange Tokens

Some exchanges offer discounts when fees are paid with their native token (e.g., BNB on Binance).

5. Optimize Your Trading Strategy with AI

Instead of making dozens of small trades, use data-driven insights from Token Metrics to make high-probability trades—reducing overall fee impact.

How Token Metrics Helps You Save on Fees

Token Metrics isn’t an exchange—it’s an AI-powered crypto research and trading platform designed to maximize your profits.

Here’s how it helps with trading fees:

1. AI-Powered Trade Optimization

Token Metrics provides bullish/bearish trading signals based on 80+ technical indicators, helping you enter fewer but higher-quality trades—minimizing unnecessary fees.

2. Trader & Investor Grades

Our proprietary grading system helps you identify top-performing cryptos, reducing guesswork and avoiding costly trial-and-error trading.

3. AI-Managed Indices

Instead of manually rebalancing portfolios (and paying multiple trading fees), use Token Metrics AI-driven crypto indices, which rebalance intelligently while keeping transaction costs low.

4. Narrative Tracking

Our AI detects emerging crypto narratives early, helping you position yourself before the market gets crowded—reducing the need for excessive short-term trading.

Practical Example: Using Token Metrics to Reduce Fees

Imagine you’re trading altcoins manually and make 20 trades/month.

  • At 0.2% per trade on $1,000 positions, you pay $40/month in fees.
  • With Token Metrics AI signals, you cut this down to 8 high-probability trades per month—reducing your fees by 60% while increasing win rates.

This is how data-driven trading saves both money and stress.

Final Thoughts

So, what are trading fees and how do they work? They’re the charges exchanges take for facilitating trades, withdrawals, and transactions—and while they may seem small, they can eat into your profits quickly.

The good news? You can minimize trading fees with the right strategies—and Token Metrics can help.

By providing AI-powered trading signals, long-term Investor Grades, and automated crypto indices, Token Metrics helps you reduce unnecessary trades, make smarter decisions, and maximize your returns—all while minimizing the impact of trading fees.

Whether you’re a beginner or advanced trader, using Token Metrics means trading smarter, not harder.

Research

Should I Use Leverage When Trading Crypto?

Token Metrics Team
8 min
MIN

Leverage trading has become a hot topic in the crypto world. Many traders are attracted by the promise of amplified profits—but fail to realize it also magnifies losses. If you’ve been wondering, “Should I use leverage when trading crypto?” the short answer is: only if you fully understand the risks and have a solid strategy.

In this guide, we’ll break down what leverage trading is, how it works, its pros and cons, and how AI-powered tools like Token Metrics can help you make smarter decisions when trading with leverage.

What Is Leverage Trading in Crypto?

Leverage trading lets you borrow funds from an exchange to increase your position size, allowing you to control more capital than you actually own.

For example:

  • If you have $1,000 and use 10x leverage, you’re trading with $10,000.
  • A 10% price increase can give you a 100% profit on your original investment.
  • But a 10% price drop could wipe out your position completely.

Popular platforms like Binance, Bybit, and OKX offer leverage levels from 2x to 125x for certain assets.

Pros of Leverage Trading

Leverage isn’t all bad. When used responsibly, it offers several benefits:

1. Higher Profit Potential

Even small price movements can generate significant returns when using leverage.

2. Portfolio Efficiency

Traders can free up capital for other positions while maintaining large exposure in a leveraged trade.

3. Opportunities in Bear Markets

Leverage allows for short selling, enabling you to profit when prices go down.

Cons of Leverage Trading

The same factors that make leverage attractive also make it high-risk:

1. Amplified Losses

Just as leverage magnifies profits, it magnifies losses. A minor price drop could liquidate your entire position.

2. Liquidation Risk

When your collateral falls below a certain threshold, the exchange automatically closes your position, locking in your losses.

3. Emotional Stress

Leverage trading is fast-paced and stressful, often leading to panic selling or revenge trading after losses.

Should Beginners Use Leverage?

No.
If you’re new to trading, avoid leverage until you have:

  • A proven strategy with consistent results in spot trading.
  • Strong risk management skills (e.g., using stop-loss orders).
  • The ability to stay disciplined under pressure.

For beginners, leveraged trading can be a fast track to losing your capital.

When Does It Make Sense to Use Leverage?

For experienced traders, leverage can make sense when:

  • You’re hedging your portfolio against downside risk.
  • You have high conviction in a trade and want to maximize gains.
  • You’re trading high-liquidity assets like BTC or ETH with well-defined stop-losses.

How Token Metrics Helps You Trade Smarter with Leverage

Leverage trading requires precision, and that’s where Token Metrics gives you an edge.

1. AI-Powered Bullish & Bearish Signals

Identify high-probability trades with real-time AI signals based on 80+ technical indicators. This helps you avoid entering positions blindly.

2. Trader & Investor Grades

Use Trader Grades for short-term trading opportunities and Investor Grades for long-term positions—helping you decide when to scale up or reduce leverage.

3. Risk Assessment Tools

Token Metrics evaluates crypto projects and market trends to reduce exposure to high-risk assets—a must for leveraged positions.

4. AI-Driven Indices

Don’t want to trade manually? Use our AI-managed crypto indices to gain diversified exposure without taking unnecessary leveraged risks.

5. Narrative Detection

Our AI identifies emerging narratives before they hit mainstream attention, giving you a strategic edge in timing trades—crucial when using leverage.

Best Practices for Using Leverage in Crypto

If you decide to use leverage, follow these rules:

  1. Start Small: Use low leverage (2x–3x) instead of going all in at 20x or 50x.
  2. Set Stop-Loss Orders: Always predetermine your maximum loss tolerance.
  3. Trade Liquid Assets: Stick to high-volume coins like BTC and ETH to avoid slippage.
  4. Don’t Overtrade: Only use leverage on trades with strong conviction and proper analysis.
  5. Use AI Tools: Let Token Metrics guide your entries and exits with data-driven insights.

Why Overleveraging Is Dangerous

Many traders lose money by overleveraging, which leads to:

  • Margin calls and forced liquidations.
  • Revenge trading, where losses push traders into reckless decisions.
  • Complete portfolio wipeouts from one bad trade.

Pro Tip: Only trade with leverage on funds you can afford to lose.

Final Thoughts

So, should you use leverage when trading crypto?

For beginners, the answer is no—focus on mastering spot trading first. For experienced traders, leverage can be a powerful tool when used with strict risk management and data-driven insights.

That’s where Token Metrics makes a difference. With AI-powered trading signals, real-time risk analysis, and narrative tracking, Token Metrics helps you trade smarter, reduce emotional mistakes, and optimize your leverage strategy.

Leverage can make you or break you—so don’t go in blind. Use Token Metrics to guide your trades and stay ahead of the market.

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