CryptocurrencyInvesting

Why Other Cryptocurrencies Failed- Here’s Is What Will Affect Successes In The Future

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Cryptocurrencies have been making headlines in every discussion for a long time now. Investors have been taking the route of using crypto assets for transactions. They believed that crypto trading offered privacy and has low service charges as compared to fiat money transactions. However, not every investor was ready to try this digital means of payments.

What could be the cause for them not adopting the cryptocurrency payments? In this article, we shall briefly look at some of the reasons why some cryptocurrencies did not last long in the global market. 

Lack of innovation 

There has been competition in launching new cryptocurrencies despite the existence of similar coins. For instance, new developers have been launching new Bitcoins despite the existing Bitcoin still heavily in demand. 

Trust issues 

How many investors trust the new coin having a higher value than the US Dollar? Of course, few people would shift their operations to a digital market without learning how the coin works or its uses. This led to the unpopularity of cryptocurrencies, consequently leading to their failures.  

Insufficient resources 

Many cryptocurrencies lacked enough financial resources to compete with large institutions. 

Lack of regulations 

Lack of regulations to control cryptocurrencies have stifled their growth and further innovations. 

Assimilation by significant finances 

Such as Wall Street, which has taken charge of cryptocurrency action, has also led to many crypto markets’ failure. These big financial institutions are beginning to make huge profits using crypto ideas.¬†

What will affect future success? 

After knowing what led to the collapse of many cryptocurrencies, we can ask ourselves if the existing crypto assets such as Bitcoin will stand the test. In less than a decade, there are more than 1,000 dead coins, while it is said that 3,000 more coins still exist at this moment. However, there are predictions that the existing coins are yet to face challenges in their future success. What are these themes that will affect cryptocurrencies’ future success?¬†

Big Finance is Here. 

About ten years ago, the revolutionist Satoshi Nakamoto introduced his first cryptocurrency, Bitcoin, to bring the digital changes in the economy. Cryptocurrencies brought traditional finance institutions to their knees with decentralized means of transactions beyond anyone’s control. The cryptocurrencies developers wanted to control banks and other big financial institutions, but it turned out to be the opposite. Instead, they are being assimilated by the same institutions that they once sought to control. A good example is Wall Street, which is steadily taking charge of crypto trading with the likes of derivatives and future products.¬†

Soon, big financial institutions will be generating high profits using cryptocurrency ideas. It is predicted that the US Dollar is not ready to be challenged, and there are high chances of it generating a multi-billion-dollar firm that will be a big blow to crypto trading. With the smaller cryptocurrencies having insufficient resources to complete this big finance, their early death is predicted soon.  

A Stable Future

The success of any cryptocurrency depends on the reason why people should use and trust it. The failure of hundreds of coins in the past has been connected to the coins’ lack of trust. People could not believe how a single coin could store a high value; hence few people could trust it. Another cause of failure is understanding the primary use of the coin. The market judges the success of a coin through its main uses. Although Bitcoin has been dominating the market due to its numerous uses, it has been linked with value volatilities, making it unconducive to many merchants. The world needs a stable coin that caters to different needs.¬†¬†

A stable coin such as USD Coin and Tether is a cryptocurrency designed to avoid the volatility of value by being pegged or backed by assets such as traditional currencies or precious metals. Stablecoins are also designed to encourage people to transact with cryptocurrency simultaneously, offering a stable store of value. It takes enough technical and financial resources to put a stablecoin into operation, unlike many cryptocurrencies, which poses a significant challenge to existing crypto coins. The invention of future stable coins is likely to overtake the crypto assets leading to their failures.  

More Losses than Profits

The alleged OneCoin ponzi scam, where investors lost millions after they were promised 300% returns for investing Bitcoin or US Dollars with a Nevada-based outfit, is a living example where many investors have lost money through crypto trading. According to Fortune Magazine, it is speculated OneCoin may have caused a loss of $ 19.4 million. Another example is Bitconnect, where investors could swap Bitcoin for Bitconect coins and lend out with expected returns of 120% yearly. Unfortunately, the long-lasting Ponzi accusations led to the US stepping in, and the exchange was abruptly closed. This led to huge losses as Bitconnect coins plunged 96% in value. 

Additionally, there have been hacking of cryptocurrency exchange systems. The Mt Gox attack of 2014, where 850,000 bitcoins were lost and hacking of one of the world’s largest institutions, Finance Exchange, have cost investors millions of dollars. We also have cases where the founders of cryptocurrency exchanges happen to die, and the investor had to count losses since nobody to access the founder’s account. One case was Gerald Gotten of Canadian cryptocurrency exchange, where 115000 investors lost about $ 137 million worth of crypto assets.¬†¬†

With these trending losses in crypto markets, what are the chances of existing coins surviving the future test? More losses are yet to be realized. The crypto market is a combination of anonymous technology that is poorly regulated, cheap, and easy for anybody to tamper with the system. 

The Bottom Line 

Even though cryptocurrencies came with several positive changes, many investors have lost their millions through various scams. The idea of becoming multi-millionaires in a short period has led many people to turn out to be more miserable than before. The future predicts the death of cryptocurrencies if there will be no means to regulate the digital market transactions. Analysts suggest that there are more problems yet to face the digital market than the world has seen. This means you need to be even more careful. But if you want to get started in cryptocurrency trading, get all the help you need from https://www.rafflescredit.com.sg.

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