Bring up cryptocurrency today, and you’ll probably learn the crypto market is down. People have realized cryptocurrency doesn’t have any real meaning or so the claim goes.
The crypto industry, meanwhile, faces major growing pains, combined with a crisis of public opinion. Yet you should predict a big market change as crypto-currency developers, investors and regulators discuss the following nine factors.
1. Many View Cryptocurrency as a Short-Term Investment
Although institutional investment in cryptocurrency is rising, most investors are millennials who see crypto as an investment in the short term. In comparison to other asset classes, people usually don’t include cryptocurrencies in their retirement plans.
Rather, crypto investors appear to want a speedy return, which means they go short rather than long. The market is competitive, as everybody wants to get in and out.
2. Market Manipulation is Widespread
One way for crypto investors to turn a profit is through “pump and dump” schemes. This is cryptocurrency slang for inflating a cryptocurrency’s value only to sell it off at its peak.
As a consequence, supply and demand influence their price. And then, supply varies widely between exchanges. When someone on a smaller exchange buys a lot of one crypto, investors on other exchanges will note and purchase the same crypto, causing a market-wide price rise.
3. Security Remains a Concern for Prospective Investors
With hacks, escape scams, and Ponzi schemes the crypto industry has earned a lot of bad publicity. For some, although this is far from the facts, ICOs are synonymous with fraud.
However, cryptocurrency exchange security remains a glaring issue. The fact is that $1.1 billion was lost. In the previous year, cryptocurrency hacks rose 369 percent.
It is because it is much easier to steal funds from exchanges, rather than from banks. Exchanges may be small companies with inadequate protections for managing millions of digital properties. While there are several stable alternatives, cross-cutting exchanges are not to be trusted.
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