Cryptocurrencies have been gaining momentum lately and have been reaching new all-time highs each day. The market has become so popular, that its market cap will reportedly cross nearly $3 trillion soon. The value of the top-ranked cryptocurrency, Bitcoin, has come close to crossing the $70,000 mark. This is because of the numerous advantages that blockchain technology promises, and the development of DApps, NFTs, Smart contracts, the metaverse and much more.
Support from big conglomerates like Facebook also helps push the narrative of crypto. Many organisations are busy with developing their metaverse in which people can virtually interact and complete tasks, earning money in the process. Metaverse tokens such as MANA and SAND have also recently spiked, thanks to crypto-based games such as Decentraland, Upland and Minecraft, to name a few.
Need for Education
Is there a need for educating about the space? In short, absolutely. It’s something I am quite passionate about when it comes to ensuring that investors are well informed. Especially as recent developments have introduced tremendous opportunities for investors to earn money. But lately, there has been a need for the proper education of this space, which needs to be given to investors to properly inform them. Especially because everyone wants to make money with ease and with very little effort.
A good example of this is the squid game token. The token was based on the recently released and vastly popular Netflix show squid game. Just the name of the token was enough to grab the attention of novice investors and apparently, take their money.
The token SQUID gained 35000% in value in just three days, even though the word of caution was given by the analyst. The token had an inherent inability for buyers to sell them in the open market. The developers behind the project eventually sold their tokens for over $2 million, causing the price to crash by 99.9% in just 24 hours.
‘Pump and Dump’ Schemes
This is not the only case of what we would call a ‘pump and dump’ scheme, and there have been many other instances in which investors believed in a coin trend and didn’t do proper research. As a rule of thumb, many investors suggest investing according to the utility which the asset promises and if the utility is needed, the demand for the coin will increase and so will its value.
To help investors not lose out through these schemes, regulation in the crypto space has become essential. Some of the regulation can be brought by exchanges on which these coins are listed, to ensure that users abide by these regulations and do not take undue advantage of novice traders.
As this system is decentralised in nature, a lot of loopholes exist that can be taken advantage of. That’s why it is also essential for government bodies to form rules and regulations to only permit trading of these assets.
