The introduction of the new Bitcoin spot (Crypto: BTC) The ETF in January of last year marked a historic moment in the launches of the ETF. In just one year, these ETFs collected more than $ 100 billion in investments, quickly becoming a privileged method for individuals, hedge funds and institutions to invest in cryptocurrencies.
Naturally, this success has led to a flood of candidates for dry for new cryptographic ETFs, some of which focus on the pieces even. This increase in interest suggests that the market could see the introduction of an ETF same corner by 2025. Although the prospect can be tempting, investing in such ETFs could be an important error.
The illusion of massive yields
The attraction of the same FNB is mainly in the potential for extraordinary yields. The pieces even can indeed rise in value in short periods, capturing the attention of many investors.
However, these impressive yields are rarely long -term durable. The pieces are designed to be ephemeral, capitalizing on the last internet follies. They are not structured for the sustainability of long -term investments.
The rapid change in popularity between different themes of memes, such as coins, cats or cats or frogs, further complicates the forecast of their success. For example, Dogecoin (Crypto: Doge)After its significant increase during the boom in 2020-20 cryptography, has since underperform, with a decrease of 20% this year despite constant media coverage. Even with a high probability of approval from Dogecoin ETF this year, it is an investment that I recommend to avoid.
The hidden dangers of coins
Unlike ETFs, parts even lack strict regulation, opening the door to market risks of the market, including pump and delight and simple fraud diets. Even the pieces even launched by celebrities can fall overnight, asking significant risks and raising uncomfortable questions later.
The challenge is exacerbated by the daily creation of thousands of new coins, which makes in -depth verification unrealizable. Although the start of a new cryptocurrency is easy, the creation of a real precious is exceptionally difficult.
In theory, the ETF application process should only filter the parts even the most secure and the most renowned. However, the transitional nature of the parts even means that any FNB based on them could be exceeded when it arrives on the market, missing the peak moment for profitability.
This phenomenon is already visible when coins move from decentralized exchanges to centralized exchanges as a global corner. As these parts are listed on major exchanges, the major growth phase has generally passed.
Consider Pepe (Crypto: pepe)A piece of memes on the popular theme on the theme of frogs. Despite its success and market capitalization of $ 4 billion, when Coinbase listed it for trading, the main growth in growth was already over. An ETF based on Pepe, if it is approved, would probably not offer the same lucrative opportunity it could have in the past.
Stunning reality: 99% lose money on coins
Given these factors, it is not surprising that 99% of memes money investors end up losing money. The identification of the right piece of memes, investing early enough and going out before the declines are difficult exploits.
Aspiring significant yields of an FNB of the same corner on the theme of the dog could lead to disappointment. The speculative nature of the pieces even engages the risks only when combined with ETF.
Dominic Basulto occupies positions in Bitcoin. The Motley Fool has and recommends Bitcoin. The Motley Fool has a policy of disclosure.
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