Knowing your tenge from your kip – around the world with cryptos

Bitcoin, ethereum, ripple, tether – you will probably have heard of most of these cryptocurrencies, just as you’ve heard of the pound, dollar, yen and euro.

But have you heard of the leone, tenge and kip? They are the currencies of Sierra Leone, Kazakhstan and Laos, respectively. Unless you have been there or have distant relations that send money in birthday cards, it is unlikely that you would know what they are.

And just as there are plenty of world currencies you won’t have heard of, there are literally hundreds of cryptocurrencies, too. And you need to understand what you are getting into before you buy into one.

You wouldn’t invest all your hard earned savings in the Lao kip without finding out more about it, right?

Latest estimates put the number of cryptocurrencies around 2,000. While a few are used by hundreds of thousands of people around the world, others are less-well traded.

BUY CRYPTOS NOW

Cryptoassets are unregulated. Your capital is at risk..

There is often good reason for this. Some cryptos are created for a specific purpose, to raise funds for a certain project or allow people to buy into a new company or idea. They are not meant to be used to buy and sell goods around the world and replace current paper money for your purchases in Tesco and ASOS.

However, if you are going to buy into one of these smaller, less popular currencies, you need to think about why you are there.

If it is for an investment, what is the strategy for it increasing in value? Just because there is a limited amount of it, that does not guarantee its price will go up. Remember that something is only worth what someone else is willing to pay.

Equally, if you want to sell your holding of these cryptos, is there a willing market ready to take it off your hands?

Next, if you are intending to use it to buy goods and services, how many merchants actually accept the coin you hold? Just like real world currencies, cryptos are not universally accepted. You couldn’t try and offload Lao kip for a round at your local Wetherspoon’s.

BUY CRYPTOS NOW

Cryptoassets are unregulated. Your capital is at risk.

Most importantly, there are currently very few regulations around cryptos, so, to a certain extent, it’s “buyer beware”. While the Financial Conduct Authority (FCA), and other City regulators, watch over banks, building societies, platforms and other financial institutions that invest and hold your cash, this is not the case for those dealing purely in cryptos – not yet at least.

Unlike eToro, which is regulated by the FCA and conforms to the highest standards, the vast majority of those selling or issuing cryptos are not.

But this is all part of the design. Cryptos are a product of people wanting to get away from a government-controlled monetary system – and with around 2,000 on offer, you can say that it has worked.

The investor, therefore, must tread carefully as no one wants to end up with an expensive pile of tenge they can’t use.

 

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework. Your capital is at risk

The post Knowing your tenge from your kip – around the world with cryptos appeared first on eToro.

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