WHY BUYING CRYPTO FROM ITS LISTING IS NOT SAFE❓
1. High Volatility
Initial Hype: New listings often generate significant excitement and speculation. This hype can cause the price to surge quickly as investors rush to buy in.
Price Swings: This excitement can lead to extreme price swings. The coin's value might spike immediately after listing but can plummet just as quickly once the initial excitement fades or early investors start taking profits.
2. Lack of Historical Data
Inadequate Analysis: With no historical price data, it’s challenging to perform technical analysis, which relies on past price movements to predict future trends.
Unknown Behavior: It’s difficult to gauge how the market will react to various conditions, such as market sentiment shifts.
3. Liquidity Issues
Thin Order Books: New listings might have fewer buy and sell orders, leading to higher spreads between the bid and ask prices.
Price Impact: Attempting to buy or sell significant amounts can drastically move the price, resulting in less favorable transaction prices.
4. Pump and Dump Schemes
Market Manipulation: Coordinated groups might inflate the price of the new coin through large purchases (the "pump"), attracting unsuspecting investors.
Sudden Drops: Once the price is high, these groups sell off their holdings (the "dump"), causing the price to crash and leaving new investors with significant losses.
5. Uncertainty and Speculation
Unproven Technology: Many newly listed crypto are still in their developmental stages, with unproven technology.
Lack of Adoption: Without a proven track record or established partnerships, there’s uncertainty about whether the coin will gain traction and be widely adopted.
6. Regulatory Risks
Legal Uncertainty: Newly listed coins might face scrutiny or even outright bans in certain jurisdictions, leading to sudden and severe impacts on their price and liquidity.
Compliance Issue: Projects might struggle to comply with existing and future regulations, affecting their operations and the confidence of investors.