The wealth of information available regarding cryptocurrency and investing in it has become sort of a double-edged sword. How? While the right information will accelerate your journey in blockchain and cryptocurrency investing, the wrong information will ruin your fortunes devastatingly. Now that blockchain tech has gone mainstream, scam projects are popping up all over. Investors have to decide which projects are worth staking their money and which projects might lead to a deep financial loss. Getting the right information is indeed a daunting task, as it is getting harder to distinguish between a genuine cryptocurrency project and a scam.
It is reported that roughly half of the products floated for Initial Coin Offerings (ICOs) in 2017 evaporated into thin air, leading to great losses for investors. The government of South Korea suspended ICOs as a way of protecting the public from losing to fraudsters. At the same time, China effected a ban on developing, trading, and supplying information on cryptocurrencies as a way of protecting the public. The ban is still in effect. What exactly do you need to know before investing in any cryptocurrency?
The average investor may not understand the nitty-gritty of the technology used for the cryptocurrency. The company you are investing in should, however, provide a document with all the technical and nontechnical information regarding the product (known as a ‘white paper’). Once an investor has an idea of the basic tech that runs the product, they are ultimately in a better position to make a decision. The viability of the blockchain productcan also be weighed against the solution the product aims to introduce. For example, Patientory is a blockchain product meant for use in the health sector. Given the need for permanent, accessible, and safe medical records, governments and private hospitals are likely to adopt the use of this product, hence strengthening the product’s viability.
Blockchain technology has preceded policy and framework formation. Governments all over the world are trying to formulate regulations and policies to keep up with the ever-evolving technology. Before investing in any project, you should check if their operations are legal. Check on the company’s registration status first. Where is the company registered? Do they have an office? Who are the team leaders behind the product? Who else is talking about the product? Are there influential figures who have endorsed it?
Get as much information as possible regarding the company, its leaders, and how they have previously performed. It will take time and effort but gives you assurance over your investment.
In the last two years, blockchain products have flooded the market. Each project comes loaded with promises of “disrupting the market.” Each product also puts up a spirited campaign with the aim of attracting investors. Before investing in any of them, take your time and do proper research. Find out who else is operating within the niche that the product has come to disrupt. Compare and contrast the projects viability and potential to grow so that you make an informed decision.
Some industries, such as the health industry, have an influx of products promising to solve this or that problem. Take time to study their differences, similarities and realistic roadmaps.
This is one of the basic investment decision questions regardless of the investment opportunity. It applies to blockchain tech products as well. One thing you can do is spread the risk by investing in different blockchain products. Use all the information you gained from answering the previous questions to decide how much you should invest. Be sure to follow your investment closely to know just when to cash in or pull out.
Cryptocurrency is still in its teething stages and there are bound to be a lot of changes that will affect the profitability of the industry. For example, taxation laws could change in your country or region. You need to keep up with all the latest news, reviews, trends and market analysis from every reliable source. Use all the information available to you to make the best investment decisions to suit your financial goals.
Data Driven Investor
Data Driven Investor (DDI) brings you various news and op-ed pieces in the areas of technologies, finance, and society. We are dedicated to relentlessly covering tech topics, their anomalies and controversies, and reviewing all things fascinating and worth knowing. DDI has only one mission: see what is coming, and do what is important – “NOW”.
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About the DDI Team
Dr. Justin S P Chan has a passion for clarity and synergy - seeing through the complexity of the intersecting spheres of technology, finance, innovation and social dynamics, to enable game-changing collaborations between entrepreneurs and innovative opportunities. Combining the vision of a true inventor and entrepreneur with his data-driven, evidence-based approach to investment, Justin also co-founded OCIM and serves as Chief Investment Officer for its fund management platform. Within OCIM, He co-manages OC Horizon Fintech, a transformational hedge fund, where he blends real applications, expertise and future-awareness into truly exceptional investment performance. Justin gains inspiration for these projects from his global network of contacts in investment and fintech communities, where he stays on the pulse of fast-moving conversations and trends affecting global markets and emerging technologies.
John DeCleene is a fund manager for OCIM’s fintech fund, and currently progressing towards becoming a CFA charter holder. He loves to travel for business and pleasure, having visited 38 countries (including North Korea); he represents the new breed of global citizen for the 21st century. Whilst having spent a lot of his life in Asia, John DeCleene has lived and studied all over the world - including spells in Hong Kong, Mexico, The U.S. and China. He graduated with a BA in Political Science from Tulane University in 2016.
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