According to an IMF report, more than 16,000 different cryptocurrencies have been listed on various exchanges, while only around 9,000 remain active today.
Indeed, the cryptocurrency industry has grown rapidly in recent years, with the market value estimated at trillions of dollars.
More particular, last November the crypto market reached for the first time a value of at least $3 trillion. Although lately, many governments around the world as well as the International Monetary Fund have been watching the world of cryptocurrencies with a more positive attitude, in the meantime they never cease to warn investors advising them to be cautious. A possible bubble would inevitably lead to new economic instability.
A recent survey of 1,000 UK adults found that cryptocurrencies were the first investment for 45% of participants aged 18-29. The IMF, in its annual Global Financial Stability Report, said that while more than 16,000 different cryptocurrencies have been listed on various exchanges, only around 9,000 remain active today.
As for the other 7,000 or so, they just didn’t come to fruition. Some developers left and yet, a large part of these cryptocurrencies, according to IMF estimates, were created for purely speculative purposes.
According to Myron Jobson, an investor, most young people today do not understand the risks involved. “Young people in the industry should be aware that yes you can make money but there is a risk of losing everything,” he argues, adding that people should not invest all their money in a single asset let alone exclusively, cryptocurrencies.
Evan Papageorgiou of the IMF sounds the alarm, stressing that this is a space that carries many risks. “There are hackers, fraud, money laundering, and many other illegal activities,” he says.
Speaking to CNBC, Finn Jundel, a 22-year-old investment banker reveals that the first time he decided to put his money into cryptocurrency he lost it as it later turned out that the cryptocurrency in question was a scam. He advises new investors in the industry to do thorough research before investing their money in this particular market.
The No. 1 tip for Judell is for investors to understand exactly where they intend to put their money on. These are the questions that, according to him, one should ask themselves before deciding to invest in any cryptocurrency.
- Does the founding team hold a lot of assets? Are they prohibited from selling them all at the same time?
- Are they trying to make money by overstating the value of their assets?
- What is their goal? Do they have something meaningful to offer the real world?
If you are looking to know more about cryptocurrency and investing, we suggest exploring Hello Crypto’s cryptocurrency guides on how to invest in cryptocurrency. They’re comprehensive and cover a wide range of topics that will transform you from a rookie to an expert.