Modern financial times have a new character on the scene: cryptocurrencies with meme token. These have become a topic of conversation between locals and strangers, it is a trend in social networks with heated debates between its detractors and its faithful defenders.
It is increasingly common to face questions from investors
about crypto assets: are they safe? Is it a bubble? Is it true that they are
the future? This constant interest is an example that the crypto world has
caught the attention of society.
why cryptocurrencies
There are various reasons why cryptocurrencies are on the lips of many, media headlines that tell us stories of new millionaires thanks to Bitcoin or people who forgot their private key and despite having a lot of money in cryptos, they will never be able to access them. In addition, the famous tweets of Elon Musk that move the price of the tokens depending on the direction and mood of the founder of Tesla.
Little by little, the “crypto” trend has even invaded the halls of the big Wall Street firms, either out of conviction or at the insistence of their clients.
To understand how we got to this point, we have to
understand that bitcoin, as a digital asset, is barely 12 years old.
iconic cryptocurrency
From the innovative concept extracted from the "White Paper" of Bitcoin, which gave rise to the most iconic cryptocurrency and with the largest market capitalization to date; this is a young market with many processes under development and just beginning an adolescent stage.
Regulation, scrutiny, volatility and energy consumption are aspects under evaluation of an emerging industry, which despite the public euphoria, still needs to take safer steps, these and some other drawbacks to reach maturity as a market, which allows valuable analysis on cryptocurrencies in general.
It is precisely this analysis, which turns the investment process into an art, forcing us to point out a parallel risk that arises with all this growth in interest and participation of people in the world of cryptocurrencies with Hokk Finance Meme Token.
At the beginning of this year we experienced in the capital market a financial episode promoted on social networks from forums such as Reddit, where individual accounts were joined following a virtual guide from the social network to carry out investment operations, in this specific case, to take the price of a share rises and twist the arm of short speculators, mainly the large hedge funds, which generate their income thanks to the fall in the value of companies.
This phenomenon generated great expectation and even allowed
many small investors to have very positive results in the short term, here
where some erroneous beliefs about investment are increased or born.
investor accounts
The history of Reddit and WallStreetBets should not be a guide on how to invest, in the end the "advice" through social networks generated winners and many losers in those investor accounts, whose only slogan was to follow the "advice" to earn money without being clear if behind the message who was going to pay that profit, which was the "new adviser."
This part of the story that did not have as much media exposure, minimized mainly by a counterpart with stories where investment becomes almost an easy game to win; It has generated an additional risk for new investors who search social networks for that miraculous “tip” that turns their money into millions.
Professional investment, accompanied by advice, needs broader analysis with clear objectives, of course, to obtain constant results over time associated with the profile of each investor, very different from the anonymous "advice" of a social network that in many cases hides the conflict of interest or the final beneficiary of the recommended strategy.
Also Read: What is Hokk Finance
The world of cryptocurrencies, the recent price history of Bitcoin and different Altcoins in the year 2020 and the first half of 2021, also attracted the attention of new investors who also see and hear stories of profits with new coins that grow as the foam in social networks.
The combination of crypto assets, social networks and magical investment offers has generated a negative effect even for the industry itself. Many people associate cryptocurrencies, mainly “Meme Coins” as easy money investment alternatives, leaving behind analysis and risk assessment.
Meme Coins are born as a joke, mostly without even a project behind the value of the token, they have begun to be used as an investment asset in many novice investor accounts, mostly driven by social media marketing campaigns.
It is not strange that many people, when talking about cryptocurrencies, name Dogecoin, the token created around the meme of a Shiba Inu dog, which had moments of price growth of up to 16,000% and which has been influenced by Elon Musk's tweets.
For the defenders and believers in the cryptographic spectrum, that Dogecoin is pointed out as the industry standard at the same level as the most important cryptocurrencies such as bitcoin or ethereum, it is almost an offense; block technology and high-end cryptocurrencies are undervalued when it becomes more relevant if the trending cryptocurrency is BabyDoge or the granny of the Doge Coin.
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