I think the cryptocurrency industry is going to crash, and I’m not alone in my thinking. Cryptocurrency is too risky as an investment strategy, and if you don’t believe me, just look at the facts. First of all, there are several different kinds of cryptocurrency, so you have to make sure to do your research before you invest your hard-earned money in something that could potentially just vanish overnight. Bitcoin trading has never been this hassle-free with Bitcoin Prime.
Bitcoin is in a bubble
Bitcoin may be the next big thing. However, there are many indications that Bitcoin is in a bubble. There are many things that could happen with Bitcoin as it continues to grow, but the most likely outcome is that it will crash and burn at some point in the near future. I’m not saying that this will happen tomorrow or even next month, but Bitcoin still has a lot of room to grow before it reaches its peak value and we’re already seeing warning signs.
Ethereum is overvalued
Ethereum, the world’s second-largest cryptocurrency by market cap, has lost nearly 30% of its value in the past 24 hours. The decline comes amid an ongoing selloff that started two weeks ago after a dizzying ascent from $8 in early March 2017 to more than $400 at one point this month. Bitcoin has dropped below $6,000 for the first time since November and all but three of the top 100 coins on CoinMarketCap are down in price today. Ethereum’s plunge followed news that a major initial coin offering had been hacked at least once, leading some investors to worry about whether ICOs have become too big too fast.
Litecoin is a scam
Litecoin was created by a man known as Charles Lee. He allegedly based it off the Bitcoin’s code, but forgot to add the k for kilobytes in the name of Litecoin which signifies that it has a different value than Bitcoin. Litecoin also does not have any transaction fees, so people can spam transactions. These things make it seem like Litecoin is more like a scam than an actual cryptocurrency.
The ICO market is a bubble
ICOs are a type of investment vehicle where companies can raise money from investors by issuing tokens that can be used on the company’s products or services. These tokens are issued when an ICO is in progress, hence the term ICO (Initial Coin Offering).
ICOs have become popular investments for many people because they offer the chance of quick returns. The problem with this kind of investment, however, is that it’s highly speculative and not backed by any physical assets. A lot of people are now calling ICOs a bubble that will soon burst causing mass panic as we saw in 1929 when Wall Street crashed.
The cryptocurrency exchanges are unregulated
Today, the cryptocurrency industry is experiencing a major issue. The exchanges are unregulated. This means that there is no way to stop a person from investing in a cryptocurrency, then dumping it on an exchange for a price much lower than what they purchased it for. This practice results in investors losing money while the person who dumped the currency gets away with their winnings.
Bitcoin is used for illegal activities
Bitcoin has been in the news for all the wrong reasons lately. It’s been used for illegal activities, like money laundering and drug trafficking. Cryptocurrencies are also not insured by the FDIC, so if your Bitcoin wallet company goes out of business or gets hacked, there’s no way to recover your funds. And finally, Bitcoin is a speculative bubble that could burst at any time.
Cryptocurrencies are not backed by anything
In order to have a cryptocurrency that is backed by anything, the currency needs to be backed by a commodity, such as gold. There are some cryptocurrencies that are backed by other coins, but this makes it more difficult for them to be worth anything in the long-term. Other cryptocurrencies are not backed by anything at all and can make it impossible for them to be worth anything in the long-term because they are only worth what people think they’re worth.
Conclusion
It’s hard to tell what will happen with the cryptocurrency industry. Will it continue trending up, or will it trend down? Nobody knows for sure. The only thing that you can do, as a consumer, is be responsible with your money. You should research coins before buying them and make sure you understand the risks of investing in cryptocurrencies.
