by Albert Pul

Investing is not an easy thing to do. It requires quality research, a solid thesis, risk tolerance and gut. In the cryptocurrency markets, tradable tokens are still owned by a few entities, exchanges where trading occurs are not properly audited and pseudonymity and anonymity are very common to come across. All these factors make it the wild west with its own share of volatility and manipulation.

The cryptocurrency market is rife with scams, failed projects and hacks. Initial coin offerings (popularly called ICOs) can be touted as being the most popular cryptocurrency investment vehicle in the past two years. ICOs raised three times (3x) more money for blockchain related projects than Seed & Angel investments in the first quarter of 2018 yet, a large chunk of ICOs appear to be not properly registered securities, dead-end technical projects and exit scams waiting to happen.

In a bull market everyone is a genius. Everything goes up! But most investors have had to cut their losses and lick their wounds since January. The pain is far from over.

Unregistered securities which were offered as ICOs will almost certainly go down, there will be more hacks, exit scams and many many abandoned projects in the near future. Even though investing in some ICOs will be like investing in Facebook when Zuckerberg was still in Harvard, some will still end up being very bad projects like the “Yo!” App of the smartphone app bubble. Venture capital funds usually swallow up some losses and take the results of bad decisions in good faith. Participating in ICOs should mean one is aware of the risks and not just potential rewards. Please take every investment decision seriously as it is real hard earned money you are dealing with.

Be more careful, understand how much risk you can tolerate, do quality research, have a strong thesis and don’t forget to have some gut.

Happy investing.