Mark Cuban says investing in altcoins is similar to buying into other assets

Mark Cuban

Mark Cuban, the owner of the Dallas Mavericks and a renowned crypto enthusiast, believes investing in alternative cryptocurrencies is the same as injecting money into stocks, bonds, and private companies. He shared this information while advising investors that look to dip their toes in the altcoin market. However, Cuban was quick to point out that investing in altcoins bears more risk, seeing as they are volatile and speculative.

According to him, treating altcoins like other investment tools means that people should not blindly copy what other individuals in the space are doing. Explaining why following other people’s investments is not a wise choice, Cuban shared that he had invested in a DeFi token dubbed Titan, which crashed to zero on June 16. While some speculated that Titan’s crash was a rug pull, Iron Finance, the project behind the token said the coin went under due to panic selling.

While altcoins seldom tank, Cuban highlighting his failed investment in Titan showed just how altcoin investments are dangerous and why investors should conduct due diligence before getting into the crypto market.

Experts concur with Cuban

Echoing Cuban’s sentiments, multiple industry experts have pointed out that it is important to conduct exhaustive research before investing. Another rule of investing they agree with is spending what you can afford to lose. On top of this, experts believe that altcoin investors should consider completing three steps to avoid unnecessary risks.

The first step is checking the reputation of a project to ensure that it is in good standing and that its founders are credible. After this, it is vital to assess an altcoin’s market access to determine that it is readily available in the market. If an altcoin is only available through a dubious backchannel, experts advise conducting more research. Also, if the means of purchase are sketchy, it is best to avoid the altcoin altogether, seeing as it might be a scam.

The final step is evaluating the technical risk, which involves checking the quality of the code behind the altcoin. However, this is a complex task, seeing as codes vary from altcoin to altcoin. To mitigate the chances of missing any potential weaknesses that might make an altcoin less secure, experts advise the hiring of a reputable third party to audit the code of the altcoin you seek to invest in.

The post Mark Cuban says investing in altcoins is similar to buying into other assets appeared first on Invezz.

Publication date: 
07/15/2021 - 00:23
Disclaimer

The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.