Financial investments are the most profitable way to increase income, but not without risks.
Until recently, time deposits or savings accounts were popular options, but more recently, alternatives such as cryptocurrencies (Bitcoin, Ethereum) have been considered.
Their popularity is evidenced by their market size, which currently hits $3 trillion, according to CoinGecko.
Even so, the crypto market is more volatile than the classic stock market. The correction in May of this year is a clear example, as investors lost a total of $830 billion, according to the Economic Times. Although cryptocurrency has become mainstream, its enthusiasts and retail investors still lack a solid knowledge base when it comes to this new industry. Since this is a free market for everyone, newcomers face many challenges. Iustina Faraon, CEO and Co-Founder Coreto, the first reputation-based social platform for the crypto community, provides an overview of investment risks and how to deal with them:
Crypto investors have to do it themselves
When you invest in stocks, you can work with a certified, professional broker who understands the industry inside and out and can offer advice, while in the crypto market death, investors mainly have to do it themselves.
Although many people started trading in 2017, when cryptocurrencies, Bitcoin, and blockchain became famous and made a significant amount of money in a short period of time, they do not represent the majority.
Untrained people bet by following third-party advice, learning important lessons at their own expense on how not to do it.
There are very few resources online
More thorough investors, who allot time for online research, will be under-resourced. There are many groups on social networks or platforms like Telegram, Discord, Reddit, Twitter, blogs and forums, but the information is not centralized and this causes confusion. It requires constant research, looking at market sentiment, recent and future events and anything else that could affect the value of a coin. Everyone has limited knowledge of the subject and cannot rely on one reliable platform for all appraisals.
Crypto influencers have entered the market
Since 2017, more and more influencers are appearing in the crypto space. During the bull period, when things were on the rise, they were promoting other projects, with or without being paid by the founders. When the bear market kicked off in 2018, most of them were gone, leaving behind those who lost significant amounts of money for taking their word for it. In 2020, more crypto influencers have joined, following the same pattern: more noise but less knowledge.
Content shared by influencers is spread across various platforms, including Twitter, facilitating quick interaction with the community; Telegram/Discord, preferred for live discussions; their own blog or a Media profile, which may be under their control; Private groups monetize buy/sell signals and marketing partnerships that increase their visibility. In this context, some people have taken on the role of influencers, making false predictions. They either get paid to cheat, or risk losing bets because they don’t have enough information. In both cases, they later deleted their online songs. This still happens to this day.
Invest considerable time and resources
For a profitable investment, it is important that all users travel on the same information superhighway at the same time. The whole process can be a very difficult, lengthy, and frustrating one, especially if the person involved has low-risk preferences.
“Ultimately, the difference between traders lies in their behavior during a bear market, when confidence levels are low and prices fall, and those who are technically savvy can increase their portfolios,” says Iustina. their private. When the trend is up and the cryptocurrency value is increasing, it is an easy win. You mainly need to hold your winners and know when to take the money off the table. “
“While institutional investors and experienced traders can use all kinds of tools and analysts, retail investors cannot access professional guidance. This is our main motivation for launching Coreto, a reputation-based platform for the blockchain industry. This way, influencers and traders can demonstrate their knowledge and pay more attention to their analytics and recommendations, as users can monitor their performance.
As their reputation score increases, they become the retail investors’ research and analysis team. Coreto makes a significant contribution during bull times and becomes the main source of information during bear markets, establishing a healthier ecosystem. ”
