CRYPTOCURRENCY Fantom is touted as a newer and better version of rival Ethereum coin – here’s what you need to know about it.
Fantom has performed well and its value has increased in recent weeks.
The coin’s price hit a new high last month at $ 3.47, down from just $ 0.016 at the start of the year.
The price has since fallen slightly to $ 3.07, but some experts predict it has yet to run.
According to CoinMarketCap, the coin has risen 6.35% in the past 24 hours and has a market cap of $ 7.82 billion.
The fury around Fantom stems from the fact that some experts believe it could become a bigger and better version of Ethereum.
Ethereum is the second largest cryptocurrency behind Bitcoin, so it wouldn’t be easy.
What is Fantom?
Fantom was founded by a South Korean computer scientist in 2018.
It is a blockchain platform and can execute what are called smart contracts.
These are programs that allow blockchains to perform more advanced transactions than just sending cryptocurrency from one person to another.
According to the Motley Fool, smart contracts are used to establish the ownership of non-fungible tokens (NFT) and decentralized finance (DeFi).
Ethereum was the first cryptocurrency to offer smart contracts, but Fantom isn’t the only rival and others are now promising to do the same faster and cheaper.
Fantom can be purchased on a number of crypto exchanges.
This is especially good for investors because it should mean that it is easier to buy and sell than some cryptocurrencies.
Predicting what price a cryptocurrency can reach is very speculative, and they have a habit of going up and down sharply.
Recently the price of Bitcoin Crashed By Wiping Hundreds Of Billions From Cryptocurrency Markets and there were predictions Shiba Inu coin could drop to $ 0.
Beware of the risks
Buying any cryptocurrency is incredibly risky.
With any investment, there is a risk that the value of your money will go down as well as up. This means that you should only invest the money that you can afford to lose.
Cryptos can be riskier than other investments because they are volatile and speculative – their price often rises and falls very quickly, sometimes seemingly for no reason.
Many cryptocurrencies have a short history, which makes them difficult to understand and predict.
This type of investment is also not protected by the regulator, which means that you have no protection if something goes wrong.
Laith Khalaf, Head of Investments at AJ Bell, said: “Cryptocurrencies are incredibly volatile and that applies in spades to the small new coins entering the market.
“If something can go up by several hundred percent in a matter of weeks, it’s no surprise that it can drop just so sharply in a short period of time.
“As always, the rule of thumb in crypto is to never invest an amount that you are not prepared to lose in its entirety, so don’t bet the house on it.”
5 risks of crypto investments
BELOW we have put together five risks of investing in cryptocurrencies.
- Consumer protection: Certain investments showing high returns based on crypto assets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: The significant volatility of crypto-asset prices, combined with the difficulties inherent in a reliable valuation of crypto-assets, puts consumers at high risk of loss.
- Product complexity: The complexity of some crypto-asset related products and services can make it difficult for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back to cash. The conversion of a crypto-asset into cash depends on the existing demand and supply in the market.
- Costs and fees: Consumers should consider the impact of fees and charges on their investment, which may be higher than those of regulated investment products.
- Promotional material: Companies may overestimate product returns or underestimate the risks involved.
Crypto asset firms in the UK must register with the Financial Conduct Authority – and you can check if they are on the Financial Services Register or if they are on a list of companies with temporary registration.There is also list of unregistered companies. If they are on this list, they may be operating illegally.
The British regulator has warned that the British risk losing ALL their money if they invest in cryptocurrencies.
If you are planning to invest in any type of crypto, do your research first and invest only the money you can afford to lose.
Also beware of scams, as the crypto market is often a target for fraud.
Some cryptocurrencies are set up as jokes or so-called meme coins, and these can be particularly prone to volatile price movements.
For example, this week the Edgelon coin was released just hours after Elon Musk changed his name on Twitter to Lord Edge.