Altcoins like safemoon and dogecoin serve little purpose and are highly risky, analysts said.
Safemoon bills itself as a decentralized finance token that is set to skyrocket in price.
Yet analysts warn it could be a "pump and dump" scheme that hurts late investors.
Investors should be very wary of alternative cryptocurrencies such as safemoon and dogecoin, many of which are unregulated, highly volatile and could cause buyers to lose all their money, analysts have said.
The breakneck rally in various altcoins has drawn in an army of retail investors, who are hunting for the next bitcoin. Dogecoin had rallied 470% in the month to Friday. Safemoon, a token launched in March, had risen 1,320%, boosted by celebrities such as Jake Paul and Lil Yachty.
"Gains are being fueled by frenzied chat across social media with influencers jostling for position to push their favoured coins," said Susannah Streeter, market analyst at investment company Hargreaves Lansdown.
"But like a slot machine, the coins being pushed into circulation are very much a speculative bet and investors should only dabble if they have money they can afford to lose."
Both dogecoin and safemoon have cooled since touching all-time highs earlier in April, with trading volumes down sharply. A plan by dogecoin supporters to send the token soaring even higher recently faltered.
Regulators stress that anyone investing in cryptocurrencies is taking a risk and should be prepared to lose all their money, given that given that the digital assets do not have inherent value like stocks or the uses of the dollar or gold.
But analysts say buyers might want to be more cautious with some cryptocurrencies than others.
Whereas bitcoin has drawn in big institutions and its market value is more than $1 trillion, relatively little is known about many altcoins that have been soaring in price.
The creators of safemoon bill it as a decentralized finance token that is destined to rocket in price. A key part of its design is that it penalizes people for selling with a 10% charge, half of which is distributed back to holders and half of which is burned, according to its website.
He argued that bitcoin is gaining weight as a form of digital gold, which people can use to hedge against inflation, although Goldman Sachs has questioned this argument. And he says ether is the fuel that powers the Ethereum network, on which non-fungible tokens and other applications can be built.
By contrast, dogecoin is "a call option on meme culture," he said. "If you believe that memes are going to be a big thing then, yeah, dogecoin would be something interesting… but by itself there's really not much [of a] use case for dogecoin."
But Ong added: "To say that all 6,000 altcoins are useless is unfair." He said he is broadly supportive of tokens that are part of the decentralized finance movement, which aims to use blockchain technology to create safe financial contracts without the need for central parties like banks. Ong cited uniswap and aave as two examples.
Moya said coins like solana were becoming more popular as people try to find competitors to the Ethereum network. "Solana's meteoric rise is based off the belief its high performance is so much faster than Ethereum, it could become the altcoin of choice for widespread adoption."
However, even tokens or coins that have more obvious purposes are liable to fail. According to the Coinopsy website, close to 2,000 cryptocurrencies have failed in the past.