LATOKEN values their users and those interested in cryptocurrency. Here we’ve named the market specifics that must be taken into account before investing in crypto assets. Want to know more? Read on.
Cryptocurrencies are highly volatile and have technological properties that are not inherent in conventional assets. What is the peculiarity of digital coins and what prospects it opens up for investors?
What causes high volatility
A young market is always more volatile than a mature and time-tested one. Regulators prohibit prominent players (such as government funds and conservative investors) from trading cryptocurrencies, so the market is not yet liquid enough.
Many fiat currencies are dependent on the quotations of natural resources produced in the country, as they constitute a significant portion of exports. Virtual coins are not tied to tangible values, so their value is quite difficult for the average layman to understand.
High volatility maybe attributed to both negative and positive properties since traders use this factor to obtain high returns.
Due to low liquidity and high volatility, as well as a lack of regulation, some groups of investors may artificially increase the prices of digital coins and use them to their advantage. Practices like this can be found in any market, but cryptocurrency is easier to manipulate than traditional assets.
The higher the liquidity, the more difficult it is to influence prices. The total capitalization of the entire cryptocurrency market is lower than the capitalization of the Apple company, so there are a lot of manipulative price movements on the crypto market.
In the traditional market, special depositories are provided for the storage of securities. These are financial organizations that settle transactions and keep records of investors’ rights to securities. Depositories are controlled by financial regulators.
Digital assets are stored on the blockchain: a distributed, decentralized ledger that is the backbone of the cryptocurrency ecosystem. A wallet (that can be of three types: software, exchange, or hardware) allows you to access the blockchain and carry out transactions with digital coins.
Each wallet, regardless of the operating environment, contains private and public keys.
The public key is a digital string that anyone can see. It consists of a set of letters and symbols and is used when sending funds to a wallet.
A private key is a kind of security key made up of a series of cryptographically generated random numbers that cannot be hacked. In fact, it is a hexadecimal number consisting of 256 bits or 32 bytes, which is created to sign translations.
The idea behind IDO is that the tokens issued by projects are already provided with pools of investor liquidity on decentralized exchanges. Often, the IDO token grants its holders the right to vote and control the direction of the underlying protocol.
The decentralization technology on which the blockchain is built has another feature. The investor may lose funds when they are sent to another address if they make a mistake while writing it. When digital coins are sent to a non-existent address, tokens are burned. Even if the cryptocurrency is sent to a stranger, it is impossible to return it since no managing organizations and third parties can cancel the transaction. That is why LATOKEN insists that users be as attentive and careful as possible.
- Ranked #2 worldwide in the startup tokens primary market with 220+ IEO’s since 2017.
- Has over 2 mln registered users, over 1 mln Android app installs.
- Is in the TOP 10 of CoinGecko rank by the amount of token pairs and coins listed.
- VCTV, a live streaming panel with high-profile industry leaders, produced over 500 shows to advise traders and investors how to navigate the crypto world with discussions, news updates, and interviews.
- Advisory Board includes former CFOs from JP Morgan and Paypal.
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LATOKEN crypto exchange does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Like other assets, cryptocurrency is subject to market risk. Please do your own research and trade with caution.