Cryptocurrency
The Dangers Of Investing In Cryptocurrency: What You Need To Know
Allocate Time To Research And Due Diligence
The modern person today has less time for research.
Falling victim to manipulation by false advertisements and social media influencers is more common since the average person is given no time to think properly about the consequences of their actions.
Moreover, scams are rising as communications are now global, and the threats to our financial well-being have evolved.
In cryptocurrency, a vast network of promoters works without any obligation to explain the dangers.
It takes a long time to research to find that, for example, XRP or Tether are in trouble (“Why Tether ($USDT) Hasn’t Collapsed (Yet) And When It Will”), and at the hands of government agencies to decide their fate.
No education or degree can help crypto investors unless they research this space thoroughly and critically.
Still, the time requirements forbid comprehensive research. Crypto demands time an average individual doesn’t have.
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Critical Thinking And Due Diligence
Investors will read about XRP and the fight against the SEC thinking they are heroically fighting the establishment, while it all has to do with the bank accounts of just four individuals at the Ripple board.
They won’t reach that conclusion without research and critical thinking. Retail investors don’t know Ripple is holding more than half of the supply of Ripple Tokens (XRP) and slowly selling them for six years.
The XRP investors suffer as the small group of people in control is taking advantage of market conditions and constantly sell massive amounts of tokens at their disposal.
The marketers on Twitter post millions of Doge memes and beg Musk to pump the coin, especially after buying Twitter. Investors will also buy Shiba Inu after reading fake stories of two brothers making millions (“Why I DON’T BUY This CNN Shiba Inu Story”) and other advertising absurdities.
The free time of retail investors is not enough when, after work, we have even more work to do at home and need even more time to attend to family needs, study with the kids, meet relatives or friends, do housework, and other situations that limit our free time.
Investors will turn to Google and buy the first new meme token they find after watching their favorite streamer discussing it (obviously via undisclosed paid promotion).
However, they will be buying at the top since this is how this market works.
The market attracts massive volumes right at the top, volumes that become the exit liquidity of whales and token devs that hold massive amounts of tokens.
At some point, prices reach unsustainable levels and begin a long period of consolidation that will last for years, until the colossal pump-and-dump repeats.
With all the wolves of Wall Street out there promoting centralized vaporware and bogus narratives, it is easy for any investor to miscalculate if they rely on information on what the internet and mainstream media promote as the experts.
There are a few experts, but they know better than to publish Doge memes on Twitter or shun real innovation and hide the working products from the masses.
In Conclusion
Investing in crypto is not for everyone.
Time and again, newcomers find themselves buying at the top, when seasoned investors are strategically exiting the market.
It is crucial to recognize that social media accounts (crypto influencers) often guide the masses towards scams, pump-and-dump schemes, and various dubious cryptocurrencies that are unlikely to stand the test of time.
Thorough research and due diligence are necessary since the cryptocurrency landscape is flooded by dangers and projects without fundamentals.
The future is bright for the crypto domain. From a small niche but with extremely intelligent people developing, it has grown into a trillion-dollar industry.
Investors will find opportunities but also should be aware that the dangers lurk and FOMO or hype generated by fake accounts and crypto influencers is always the worst advisor.
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Originally published at https://read.cash.
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