Regardless of whether these predictions turn out to bepartially right, spot on, or out in left field, what cant be denied are therisks involved with cryptocurrency investing.
For starters, cryptocurrencies lack the traditionalfundamental metrics that aid investors in determining an appropriate valuationfor an asset. With a publicly traded stock, we can look at balance sheets,income statements, earnings reports, and listen to the commentary of managementwhen determining whether a stock is worth buying or not. Cryptocurrencies havevirtually no metrics that can be examined, save for processing speed and dailyaverage transactions, neither of which tells us much about the long-term valueof digital currencies.
Just as worrisome is the fact that blockchain technology is stuckin a vicious Catch-22. The digital, distributed, and decentralized ledgerthat underlies most cryptocurrencies has worked splendidly when kept within theconfines of small-scale projects. However, no businesses have been willing totake the training wheels completely off of blockchain yet, primarily becauseits untested in the real-world — and gaining this real-world experience isonly possible if big businesses give this technology a chance.
In sum, while cryptocurrencies are still liable to bring alot of excitement to the table for the remainder of 2018, Id suggest keepingyour money safely on the sidelines and out of virtual tokens.
Sean Williams has no position in any of the stocks or cryptocurrencies mentioned. The Motley Fool owns shares of and recommends CME Group. The Motley Fool recommends Cboe Global Marketsand has no position in any cryptocurrencies mentioned.The Motley Fool has a disclosure policy.Read More..