THE CRYPTO-INVESTMENT MARKET AND ITS TRAPS (Part 1)

Tamir Cohen jr
Apr 24, 2018 · 6 min read

First Lesson in Crypto-Investing — to know that you know nothing

Crypto-Assets have been around for quite a while now. Since Bitcoin’s creation in 2009, the number of crypto-assets has increased steadily. Currently, more than 1,500 coins and tokens are listed on Coinmarketcap valued at an aggregate of $400 billion, up 22 times since the beginning of 2017. Along with the explosion of crypto-prices in 2017, a lot of crypto-investment schemes have been launched offering investors a broad range of investment opportunities. Besides the general risk of failure typically associated with startups and new technologies, many of those crypto-investment schemes are questionable or straight frauds.

THE DAWN OF CRYPTO-ASSETS OR WELCOME TO THE NEW CASINO CAPITALISM

Rafael Delfin, Head of Research at the crypto-research company Brave New Coin published a great “General Taxonomy for Cryptographic Asset”. This taxonomy positions crypto-assets like Bitcoins (BTC) or Ether (ETH) as a new superclass of assets and aims to provide investors a guidance in understanding it. Reading this paper and other great publications around crypto-assets such as Chris Burniske’s Crypto-Investor’s Guide is highly recommended to investors to develop a better understanding about the nature of crypto-assets. This, in turn, is a conditio sine qua non before any crypto-investment.

  • non-regulated, non-licensed, and not-registered issuers and/or promoters
  • non-standardized investment offers without the required transparency
  • a multi-cultural market with a very heterogeneous understanding of ethics, accountability, and responsibility
  • bad actors and fraudulent schemes;

LET’S SPEAK ABOUT THE CRYPTO-ASSET SALES CHANNELS

“Jane & John Doe” investors have to choose between some alternatives when investing into crypto. Basically, we can distinguish between two types of crypto-investments:

  • Crypto-Derivatives: memberships in a private Crypto-MLM schemes, participations in crypto-pools or shares (equity) in trusts. They raise money from their investors to invest into Crypto-Assets.
Crypto-Assets and their retail sales channels

The Financial Telegram

Financial Intelligence for Investors Protection

Tamir Cohen jr

Written by

Passionate writer and reader. I am executive editor of “The Financial Telegram”, an financial intelligence service with a special focus on online-investments.

The Financial Telegram

Financial Intelligence for Investors Protection