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Bad Cryptocurrency Ventures Leave Former Customers Abandoned with Few Options
There are plenty of reports in the industry about the ways that initial coin offerings (ICOs) and similar funding campaigns can scam consumers. There’s even more reports of theft and hacking. However, one of the problems that is rarely discussed is that of abandoned cryptocurrency platforms.
The lack of performance by these coins has easily been one of the biggest downfalls of the year, especially considering the bearish market. There have only been a select number of cryptocurrencies that have managed to survive the storm or even outperformed Bitcoin. A perfect is example is that of one Redditor, who said that they “lost 95 percent of 25k and have been buying all the way down.”
There was a HODL meme that circulated last year that encouraged traders through the ban that China put on the cryptocurrency industry, along with many other negative news cycles. However, hodling has since been proven to be a horrible way for investors to operate with their altcoins. As all this bad news has continued to rise to the surface, there are a few lessons that investors can take from it.
1. Watch the Difference Between a 90% Loss and a 95% Loss.
Wanchain and Icon are great examples of this difference. Wanchain went through a 90% loss from its highest high and will need a 10x multiplier to get back to their former level. However, Icon’s 95% loss took it down even further, now requiring a 20x multiple to get back to the $12.04 price tag.
2. Be Cautious When it Comes to Forked Coins and Their Market Cap.
The market cap is the number of coins that a company establishes in circulation, which is multiplied by the price for each coin. This calculation is already horrendous, but it is worse with forks. Bitcoin private and bitcoin diamond, for example, have calculated their market caps by the number of BTC holders that have the power to claim those forks, despite the fact that there’s no interest or intention. Furthermore, the true circulating supply is substantially smaller.
3. Price Floors are Fictitious.
Even when a coin experiences a 90% drop, the idea that it can’t come back is ridiculously. The recovery may not bring the coin back to where it started, but it can still bring it to a healthy price. Most traders purchased tokens at a seemingly bottom level, but, as one trader said, “I bought bitclave (CAT) on exchange at ICO price thinking wow a sh*tcoin finally at ICO … then it went -99% on me.”
Naysayers of the industry want investors to believe that the markets are dwindling, but there are plenty of investors that hold BTC or even BCH from a year ago and are still 30% ahead of where they started. One investor put it plainly and said, “I had a dream of making so much I could retire. I thought it was a once in a lifetime opportunity to make tons of cash and I was worried about missing out, so I took a huge risk. Life has humbled me. I’m an idiot.”
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.