CRYPTOCURRENCY Fantom is being touted as a newer, better version of rival coin Ethereum – here’s what you need to know about it.
Fantom has performed strongly and its value has gone up in recent weeks.
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The price of the coin reached a new high last month of $3.47 – that’s up from just $0.016 at the start of the year.
The price has since eased off slightly to $3.07 but some experts are predicting it has further to run.
According to CoinMarketCap, the coin is up 6.35% in the past 24 hours and has a market cap of $7.82 billion.
The furore around Fantom comes from the fact that some experts think it could go on to become a bigger, better version of Ethereum.
Ethereum is the second-largest cryptocurrency behind Bitcoin, so this would be no mean feat.
What is Fantom?
Fantom was founded by a South Korean computer scientist in 2018.
It is a blockchain platform and can run what are known as smart contracts.
These are programs that allow blockchains to run more advanced transactions than just sending cryptocurrency from one person to another.
According to the Motley Fool, smart contracts are used in establishing ownership of non-fungible tokens (NFTs) and decentralised finance (DeFi).
Ethereum was the first cryptocurrency to offer smart contracts, but Fantom is not the only rival out there and others are now promising to do the same thing faster and cheaper.
Fantom can be bought on a number of crypto exchanges.
That’s particularly good for investors as it should mean 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 rising and falling sharply.
There was recent speculation over whether Solana could hit $300 or if IoTex could reach a value of $1.
Recently, the price of Bitcoin crashed wiping hundreds of billions from cryptocurrency markets and there have been predictions Shiba Inu coin could crash 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 could go down as well as up. That means you should only invest money you can afford to lose.
Crypto can be riskier than other investments because they are volatile and speculative – their price often rising and falls very quickly, sometimes seemingly for not reason.
Many cryptocurrencies have a short track record, making them difficult to understand and predict.
This type of investment is also not protected by the regulator which means you have no protection if things go wrong.
Laith Khalaf, head of investment at AJ Bell, said: “Cryptocurrencies are incredibly volatile and this applies in spades to small new coins entering the market.
“If something can go up several hundred percent in a few weeks, then it should come as no surprise that it can fall just as sharply in a short space of time.
“As ever, the golden rule of crypto is never to invest an amount that you’re not willing to lose in its entirety, so don’t bet the house on it.”
5 risks of crypto investments
BELOW we round up five risks of investing in cryptocurrencies.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
UK Crypto asset businesses must register with the Financial Conduct Authority – and you can check to see if they are on the Financial Services Register or if they are on a list of firms with temporary registration.There is also a list of businesses not registered. If they are on this list then they may be operating illegally.
The UK regulator has warned that Brits risk losing ALL of their money if they invest in cryptocurrencies.
If you are considering investing in any type of crypto, do your research first and only invest money you can afford to lose.
Be wary of scams, too, as the crypto market is often a target for fraud.
Look out for fake celebrity endorsements or social media profiles pushing certain coins.
Some cryptocoins are set up as jokes or so-called meme coins, and these can be particularly prone to volatile price movements.
For example, this week Edgelon coin was launched just hours after Elon Musk changed his name on Twitter to Lord Edge.
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