Stay away from these 2 cryptocurrencies this week due to prevailing negative sentiment
In the past day, two digital currencies have captured the media spotlight, casting a shadow of predominantly negative public opinion. Investors are advised to exercise caution with Polkadot (**DOT**) and Bittensor (**TAO**) due to the prevailing atmosphere of fear, uncertainty, and doubt (**FUD**).
These currencies have risen to prominence among the top five trending assets on **Santiment**’s social trends chart. TAO, in particular, has become the focal point of social discussions, with an overwhelming share of negative sentiment.
The broader **cryptocurrency market** is reeling from a significant downturn, triggered by a sharp decline in Bitcoin’s (**BTC**) value, which has reached a critical **support** level. This downturn is likely to ripple across the entire ecosystem, especially affecting these two projects that have been mired in recent controversies and unfavorable press.
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**Trending Coins. Source: Santiment**
**Bittensor (TAO):**
On July 3rd, Bittensor’s blockchain was compromised in a significant security breach. Malefactors siphoned off $8 million in TAO tokens from several wallets. In response, the network’s operations were abruptly suspended to mitigate the breach. Bittensor’s leadership has reassured stakeholders of their commitment to averting future incidents, temporarily freezing the blockchain to conduct a thorough investigation.
This decisive action, however, has sparked debate within the community, drawing attention to potential centralization concerns. Blockchain analysis indicates that the last transactions were recorded at approximately 23:00 UTC on Tuesday. Security expert **ZachXBT** has raised suspicions that the breach may have resulted from a compromised private key, though the inquiry remains active.
The incident has heightened scrutiny over the project’s security measures. Investors are advised to tread carefully with TAO in the upcoming weeks, as the potential for the stolen tokens to flood the market looms, posing a risk to the token’s valuation. Presently, nearly half of all social media discussions about Bittensor convey a negative sentiment.
**Bittensor TAO, sentiment. Source: Santiment**
**Polkadot (DOT):**
Polkadot has come under fire for its recent financial conduct, sparking concerns over its economic resilience. The organization’s treasury report disclosed a staggering $87 million in outflows for the first half of 2024. A significant portion of these funds, over 42%, was allocated to promotional efforts, including collaborations with influencers and event sponsorships. Concurrently, Polkadot’s treasury income has seen a marked decline, plummeting from 414,291 DOT to 171,696 DOT.
Tommi Enenkel, the lead ambassador, has estimated that the company’s financial runway could last approximately two years. Contradicting this view, CEO Fabian Gompf has assured that the treasury’s resources are far from depletion. He has conceded that certain expenditures have not yielded the desired returns and is advocating for community-driven decision-making to rectify the situation.
A particular expenditure of $53,000 for a six-month animated logo placement on CoinGecko has been cited as an example of fiscal imprudence. Venture capitalist Adam Cochran has likened Polkadot’s promotional spending to wasteful extravagance. These financial practices have ignited a debate regarding the organization’s long-term viability and the judicious use of its resources.
**Disclaimer:**
The information provided here is not to be construed as financial advice. Investment decisions carry inherent risks, and investors should be aware that they are responsible for their own investment choices.
