Buying a cryptocurrency immediately after it is listed carries many risks that investors should be aware of. Here are the most prominent of these risks:
1. Sharp price fluctuations
When a coin is listed, prices are subject to sharp fluctuations. They can initially rise significantly due to high demand, but they can quickly fall when early investors (known as “early backers”) start selling.
2. Lack of sufficient data
There is often not enough information about the coin, its project, and its team. This makes it more difficult to make an informed investment decision.
3. Dumping risks
Early investors who own large amounts of the coin (such as developers or early project backers) may sell large amounts immediately after listing to make a profit, causing the price to collapse.
4. Low liquidity
New coins often face a liquidity problem, which can make it difficult to sell the coin when needed or can lead to large price differences between demand and supply.
5. Market Manipulation
The coin can be manipulated by “whales” (owners of large amounts of the coin), artificially raising the price before suddenly collapsing.
6. Project Failure
Listing the coin does not always mean the success of the project. If the project does not have a strong vision or a qualified team, the coin may fail and its value may drop significantly.