Is investing in cryptocurrencies a good bet?
Clearly, not at present.
In fact, according to Forbes: “… looking at cryptocurrencies between 2009 and 2019 the default rate was higher still at 8 out of 10.”
How to know which digital asset to invest?
Researchers at the University of Vaasa in Finland have studied the phenomena and posit that positive signs include where:
- the coins had slightly more stable, and in fact lower, returns over the first month after issuance,
- where the miners set aside a lower percentage of coins for themselves,
- the founders are identified and legitimate, and
- coins with “lower minimum rewards per block, both in absolute terms and relative to their total coins and with a lower controlled supply.
The smart money appears not to invest in the initial coin offering at all but to watch the coin over a period of time to see if it will have staying power.