CRYPTOCURRENCY EthereumMax has attracted attention recently, with its value up by more than 20% over the past 24 hours.
The crypto launched last month, but investors are being warned about “wild price swings”.
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Anyone looking to invest in cryptocurrencies should know it’s very risky, and only invest what you can afford to lose, if anything at all.
Due to its volatility, your cash can go down as well as up at the blink of an eye so it’s not a guaranteed way to make money.
As always, never invest in something you don’t understand and be aware you may not be able to convert cryptoassets back into cash.
Newer cryptos are also riskier than those that have been around for a while, such as Bitcoin, and make you more open to scams.
5 risks of crypto investments
THE Financial Conduct Authority (FCA) has warned people about the 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.
What is EthereumMax?
EthereumMax (EMAX) is a new cryptocurrency token, hosted on the Ethereum blockchain.
It launched on May 14 and has been listed on CoinMarketCap since May 18.
There’s a total supply of two quadrillion tokens, according to its website.
It’s essentially a spin-off of Ethereum, which is the second largest cryptocurrency after Bitcoin.
Why is the price going up?
The value of EthereumMax is currently sitting at $0.0000002907, up by 21% over the past 24 hours, according to CoinMarketCap.
A few weeks ago, EthereumMax claimed to be the only cryptocurrency that can be used to buy official tickets for the pay-per-view boxing fight between boxer Floyd Mayweather and YouTube star Logan Paul.
This is set to take place on Sunday, June 6 in Florida.
Myron Jobson, personal finance campaigner of Interactive Investor, told The Sun: “The creators of EthereumMax will hope that the tie up with the star-studded boxing event will help propel the profile of the coin, which is still incredibly new having only launched last month, to new heights.”
The cryptocurrency has also benefited from support from celebrities.
At the end of May, former NBA star Paul Pierce tweeted: “@espn I don’t need you. I got @ethereum_max.
“I made more money with this crypto in the past month then I did with y’all in a year.”
ESPN fired the analyst after he posted a video of himself partying with strippers without offering any apology to his fans.
How risky is EthereumMax?
Investing is always a risk but putting cash into cryptocurrencies is even riskier as they are very volatile.
There’s also scant regulation for cryptocurrency firms, so you likely won’t have any protection if things go wrong.
Mr Jobson said the recent launch of EthereumMax means it’s “yet to build up a track record to observe trends”.
He added: “Cryptocurrencies are notorious for wild price swings.
“It is not uncommon for the value of cryptocurrencies to quickly fall by hundreds.
“The yo-yoing price of the asset is simply too much for many investors to stomach.
“Cryptocurrencies, and those involved in the space, remain highly speculative and should only be a tiny portion of a portfolio – whatever your risk appetite is.”
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