Crypto Market Risk Problems & Solutions
Last updated
Was this helpful?
Last updated
Was this helpful?
Despite the enormous volatility, which may sometimes look wonderful when it's positive but cause hundreds of thousands of investors to lose their money when it's negative, the cryptocurrency market appears to be gaining popularity daily according to the fact that new investors are joining every day. We'll highlight some of the key market problems and how AVANZO may address them in a way that benefits investors.
The high volatility in the bitcoin market is by far the largest problem. On exchange platforms, the prices of cryptocurrencies fluctuate sharply over a brief period of time. The market is considered to be very volatile when an asset that may be traded might fall by as much as 49% in less than 24 hours. Although several factors contribute to the market's extreme volatility, "whales" actions may be the greatest ones.
Many projects "die" in protracted bad markets as a result of teams being unable to deliver their development goals owing to a lack of financing. This is especially true with currencies that are constructed without any form of usefulness or techniques to maintain development in the harshest market scenarios. To put it simply, the $AVAN token has the usefulness of being used as a ticket to real estate investments, plus you will get 50% of the real estate returns.
If new people joined the project, of course, this issue is that at some point the cycle will be longer and harder and may end up with older stakeholders dumping on new ones and causing huge losses as it is explained in figure 3. Pyramid scaling projects rely on new people joining the project and older ones making a profit (the older you are in the project the more profit you make).
As can be seen, older investors gain more, and there is a greater chance that fresher investors will be dropped, as opposed to "first come, first serve,". Avanzo operates differently because investors' money is completely safe. After all, it is invested in real estate, and they receive an annual return from the property's profits. In addition, if investors choose to sell their real estate and receive their initial investment back, that option is completely acceptable as long as the DAO earns more than 50%.
We are aware that if a project relies entirely on project coins to cover all of the costs of team members, marketing, or other related expenses and has no cash flow, this may eventually result in the problem where a project is unable to continue paying for its operations with coins and has no other means of funding to continue growing or developing. To use the term "bear market" as an example, this problem gets worse when hard market days occur.
