What Makes a Crypto Coin High Risk

[Nomad]

Sometime back I was trying to buy REN on Binance and I saw a notification that said the asset is highly risky. I was trying to invest in REN because of its use case (it can be used for cross-blockchain transactions), however, I was reminded of the asset being high risk. What are the factors that make any asset high risk?

 

[Riberet19]

Sometime back I was trying to buy REN on Binance and I saw a notification that said the asset is highly risky. I was trying to invest in REN because of its use case (it can be used for cross-blockchain transactions), however, I was reminded of the asset being high risk. What are the factors that make any asset high risk?

I think that one of the main reasons may be due to the lack of solid fundamentals that make it a serious investment and rather that it is a highly speculative investment, that is, it does not have an established purpose, this can lead to high speculation and therefore a lot of volatility, another factor may be that the cryptocurrency is very young and there are not many investors and therefore little market capitalization, this can make it very volatile when some money enters or therefore when money leaves the asset.

 

[Nomad]

The market cap, trading volume, age, use case, scalability, and security are some of the factors that make crypto a good investment or bad investment. However, sometimes no such established criteria work. That's what happened with dogecoin, or even Shiba inu, or floki inu for that matter. Whether the asset poses risk or no risk is depended on certain individuals or even companies.

 

[Heatman]

For them to send that notification REN is a high risk coin shows that there's a very big chance that its value isn't going to stable on the positive side for long but it can actually go both ways. When you're investment in it, do so with caution in order to be on the safer side.

 

[Henrywrites]

Sometime back I was trying to buy REN on Binance and I saw a notification that said the asset is highly risky. I was trying to invest in REN because of its use case (it can be used for cross-blockchain transactions), however, I was reminded of the asset being high risk. What are the factors that make any asset high risk?

It is simply the fact that those coins that has risk can give you massive gains in a couple of hours or massive losses during those period. You may experience your thousands of investments going down the drain and I doubt that is what you want. So, Binance was simply warning you about it.

 

[Nomad]

It is simply the fact that those coins that has risk can give you massive gains in a couple of hours or massive losses during those period. You may experience your thousands of investments going down the drain and I doubt that is what you want. So, Binance was simply warning you about it.

If you are referring the the specific coin I was talking about, short term gain or short term falls were not happening with that particular coin. I have bought a lot of coins on Binance, including something like Pepe or even Floki and shiba inu and Binance never called these high risk asset.

 

[Heatman]

If you are referring the the specific coin I was talking about, short term gain or short term falls were not happening with that particular coin. I have bought a lot of coins on Binance, including something like Pepe or even Floki and shiba inu and Binance never called these high risk asset.

Seriously, I would just consider it a red flag from Binance not to invest in a coin for them to label it high risk that way. They haven't done something like that in most of the other coins they have on the platform, so why do it with this particular coin? I will definitely stay away from it and watch what happens by the sideline.