2018 has been a very volatile year for the young cryptomarket. We have seen the increase of funding for ICO’s and the total market cap for all listed tokens drop from 600 billion to 100 billion on the lows of early December. A loss of more than 70% overall! Investing in crypto’s, we have learned the hardest way possible, is not for the faint of heart and chasing bubbles never ends well. We do however can share some thought on the way to learn from the experiences of 2018 to make sure we do not make the same mistakes in 2019.
MVP:
Firstly, 2017 and early 2018 saw the rise of the ICO without a product or service. The promise of a X10 return on your ICO investment meant people poured hundreds of millions of dollars into paper projects. Some of these projects never even having a good business model or team of experienced professionals. The lesson for 2019 is looking at projects that have either a working product or service and experienced businessmen who know how to build a company. The lack of either one should be a red flag for every potential investor.
Utility:
Why tokenize? A very important question. If a project is trying to get you to use their token for a single application, you might want to rethink your investment. If a token doesn’t have an easy to use real world application or advantage that makes your life easier but is just a way to provide a company with the money they need to further develop their idea, you should probably be skeptical.
Regulations:
Most of the companies that listed in 2018 are still working on their business model and with governments around the world catching on to the potential of blockchain, these companies face extra hurdles that take time, effort and significant investments, to overcome. The lesson for 2019 is to make sure regulatory compliance is mentioned in plans, whitepapers and the teams have the expertise to back that claim up.
Don’t invest more than you can afford to lose:
We all probably know someone who has made this mistake. And it is almost hard to blame them. During the crazy bull run of 2017 and in early 2018, the sky seemed the limit. People literally turned a 1000 dollars into multi millions and the promise of mass adoption lured even experienced investors into taking huge risks in the cryptomarket. People fell for scams, pump and dumps and mortgaged their houses to buy bitcoin at almost 20 thousand dollars. Needless to say, some if not most of these investors got wiped out or REKT! The lesson being. If you invest into a company of cryptocurrency, try to play the long game and leave your emotions out of making financial or investment decisions.
Have a great and successful 2019.
For more information please visit us at www.tradebits.co
Thank you,
The Tradebits team.
