Connect with us

Hi, what are you looking for?

Editor’s Pick

The main challenges of crypto investing and how to tackle them

Financial investments are the most lucrative way to increase income, but they don’t come without risks.

Until recently, term deposits or savings accounts were the go-to options, but lately, alternatives such as crypto coins (Bitcoin, Ethereum) have been considered.

Their popularity is proven by the size of their market, which currently reached $3,000billions, according to CoinGecko.

Despite this, the crypto market is more volatile than the classic stock market. This year’s May correction is a clear example, as investors suffered total losses of $830billions, as shown by Economic Times. Even though crypto has become mainstream, those passionate about it and the retail investors are lacking a solid knowledge foundation when it comes to this new industry. As it’s a free market for all, the newcomers face many challenges. Iustina Faraon, CEO and co-founder Coreto, the first reputation-based social platform for crypto communities, provides an overview of the investment risks and how to tackle them:

Crypto investors have to do it themselves

When you invest in stocks you can work with a certified, professional broker, who knows the industry inside and out and can offer advice, whereas in the crypto market the investors mostly have to do it themselves.

Although many started trading since 2017, when crypto coins, Bitcoin and blockchain became well-known, and managed to earn significant amounts of money in a short window of time, they don’t represent the majority.

Those without training placed their bets by following the advice of third parties, learning important lessons at their own expense about how not to do it.

There are very few online resources

The more thorough investors, who allocate time to online research, suffer from the lack of resources. There are many groups on social media or platforms such as Telegram, Discord, Reddit, Twitter, blogs and niched forums, but the information isn’t centralised and this causes confusion. There’s a constant need to research, to look into the market sentiment, recent and future events and anything else which could influence the value of the coins. Everyone has limited knowledge about the subject and can’t rely on a trustworthy platform for all the due diligence.

The crypto influencers entered the market

Since 2017, more and more influencers have emerged in the crypto space. During the bull run, when everything was on the rise, they were promoting other projects, with or without being paid by the founders. When the bear market started in 2018, the majority of them disappeared, leaving behind people who lost significant amounts of money because they listened to them. In 2020, more crypto influencers joined, following the same pattern: a lot of noise but little knowledge.

The content shared by the influencers was spread out on various platforms, including Twitter, which facilitates a quick interaction with the community; Telegram/Discord, favoured for the direct discussions; their own blog or a Medium profile, which can be under their control; private groups that monetise the buy/sell signals and marketing partnerships which increase their exposure. In this context, some people took on an influencer role, issuing wrong predictions. They were either paid to mislead, or ventured to place losing bets as they didn’t have enough information. In both cases, they then erased their online tracks. This still happens to this day.

Significant time and resources invested

To make a profitable investment, it’s important that all users travel on the same information superhighway at the same time. The whole process can be a very difficult, lengthy and frustrating process, especially if the person involved has a low risk appetite.

Iustina says, “After all, the difference between traders lies in their behaviour during the bear market, when the trust levels are low and the prices drop, and those that master the technique can increase their portfolio. When the trend is in bull run and the crypto value is on the increase, that’s an easy win. You mainly need to hold on to your winners and know when to take the money off the table.”

“While institutional investors and experienced traders can make use of all sorts of tools and analysts, the retail investors can’t access professional guidance. This was our main motivation for launching Coreto, a reputation-based platform for the blockchain industry. This way, influencers and traders can prove their knowledge and pay more attention to their analysis and recommendations, as users can keep track of their performance.

When their reputation score increases, they become the analyst team and the researchers of the retail investors. Coreto contributes significantly during the bull run moments and becomes the main source of information in the bear market, establishing a healthier ecosystem.”

Read more:
The main challenges of crypto investing and how to tackle them

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Editor’s Pick

The UK Government’s Flexible Working Taskforce has published practical guidance for employers designed to support hybrid working models, in a bid to help organisations...

Editor’s Pick

Becoming a franchisee gives people the chance to own a business in which they are invested and passionate – a stark contrast to working...

Editor’s Pick

Whilst we hear a lot about starting a business, it is not every day that we hear about leaving one. There are many reasons...

Editor’s Pick

There is no doubt that virtually every industry has experienced significant changes and shifts throughout the COVID-19 pandemic. Whilst the economy is steadily recovering...

Editor’s Pick

A prominent Tory peer has been accused of racism for allegedly saying that someone was “a waste of a man’s white skin”. Baroness Mone,...

Editor’s Pick

Abrdn has struck a GBP1.5bn deal to buy the online investment platform Interactive Investor, as the fund manager pushes into the increasingly popular realm...

You May Also Like

News

COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...

News

BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...

News

REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...

Editor’s Pick

London has beaten off competition from Paris and Berlin to become the highest ranked European city for property investment, according to a survey...

Disclaimer: Respect Investment.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 Respect Investment. All Rights Reserved.