Overview
Investing in cryptocurrencies was very simple two years ago when there was a limited number of cryptocurrencies circulating in the market. In 2017, the market saw a rising number of start-ups funding themselves by launching cryptocurrencies. By these different events occurring in the cryptocurrency market, investors started to show more due diligence to determine which cryptocurrency assets involved the lowest risk rates for their investments.
If you have decided to start investing in cryptocurrency, there are some risks involved that you must be aware of. Those risks involve:
High Volatility
Volatility in crowded cryptocurrency space provides attractive spreads on bullish markets, but at the same time, investors are exposed to more increasingly risks involved. Bitcoin is a perfect example of a highly volatile cryptocurrency. This highly volatile cryptocurrency means that cryptocurrency investors must first analyze the cryptocurrency market before making any investment.
Higher Number of ICOs
ICOs are a crowdfunding asset for many new start-ups. Companies start pitching cryptocurrency investors that take the risk of buying their tokes or cryptocurrencies before the start-up is launched and the money provided by the investors is raised to develop their platform further. Cryptocurrency investors put their trust in the start-up and they expect the final product or service will be delivered will increase the value of the cryptocurrency they have invested in value after the platform is launched.
Unlike traditional IPO, cryptocurrency investors do not get equity, and the start-ups have the obligation to deliver on their promises. At the same time, these investors must be very careful, as there are a lot of cryptocurrencies that do not deliver the promised results.
Failing Cryptocurrencies
At the beginning of 2018, the number of cryptocurrencies in the market was approximately 1400. Based on some observations, 40 percent of these cryptocurrencies, failed to deliver on their promises due to bad management, lack of technical features and poor market studies. Most of the new cryptocurrencies failed to engage in the market and caused their value to decrease.
The risks involved make the cryptocurrency market more and more challenging for cryptocurrency investors. They find themselves studying and observing the value that these cryptocurrencies and start-ups have to offer on them. Additionally, cryptocurrency investors, due to the risks involved, have to study the cryptocurrency market when they are at the lowest or highest, check recent trends and gather insights.
Conclusion
As a matter of fact, when you invest in cryptocurrencies, you are exposed to risk. Surely there are a lot of cryptocurrencies that achieve the highest standards to reach their goals and deliver on their promises. The best way to invest in cryptocurrencies is to be very diligent and get the necessary business technical insights. However, if you do not meet the standards required to make a profitable investment, you can simply get some expert research, work with professional cryptocurrency investors from General Novus and we will help you make highly profitable cryptocurrency investments.