Investors Prospecting Cryptocurrency in Wait and See ModeAugust 12, 2018
The risks involved in investing in cryptocurrency and the return on investment that you can get with this currency is based on several factors that influence the price trend. There are several popular digital currencies trending literally every day. Not all crypto currencies are founded with similar philosophies and goals. Some crypto are gold-backed.
Some are low risk cryptocurrency portfolio and some are high risk portfolio. The crypto works like, where I give you my, money and you are using that money and starting off with a venture and you make profits. In return to my lending, what you do is return my money in the form of a security and that security is the crypto. This security can in turn be traded. And regulators are looking to regulate this aspect of the offering and trading of the crypto.
Several institutional investors are getting to be more interested in investing in cryptocurrency. However, since there is no regulation and it is not possible for them to buy this crypto based asset on the exchanges, they are just watching the market trends and they are prospecting on the right time to start off with their investment.
There are several warnings being issued with respect to the risks involved in cryptocurrency. Though there are ICOs literally all over the crypto market, investors are concerned about investor protection, price volatility and the unregulated trend that is persistent in the market. However, governments, law makers and economists are also sure of the fact that they do not want to thrash out a valuable innovation without testing its practical applicability.
Regulators are looking to achieve a balance between regulating the crypto at the same time providing protection for investors. They are exploring and inquiring into how this can be ultimately achieved. Several countries are issuing policies relating to the crypto. This is a nascent industry and lot has to be enquired and regulated. The risks of money laundering with this virtual currency is pretty high.
Governments want to avoid the practice of moving money via the companies that are registered in a particular country, while the real owners are in some other part of the world. Customer verification is being considered to be a very important requirement in the process.
Laws are coming very soon, to tackle the entire blockchain industry because several small nations and territories are already establishing themselves as hubs for cryptocurrencies. Several startups in the blockchain world are mushrooming every day. This being a new form of financial activity it is important for the ICOs to provide their customers with a clear idea of the risk they are dealing with.
The provider of crypto should have sound financial resources in order to ensure that the ICOs are being executed using sound and safe strategies in a way to ultimately achieve its objectives. The assets of the customers should be protected with every reasonable precaution. Since technology is extremely powerful, probably the crypto is here to stay and the wait and see investors might soon jump in to the pool.