Is it Safe to Invest in Crypto Startup During Recession
Startups are known to raise the series of rounds. Some of these startups raise rounds of fundings based on their growth. A lot of such startups establish themselves in short time but as the market faces bear claws, they don't survive.
BlockFi used to be one such crypto startup which raised rounds and established itself in short time. But as the tought time arrived the company started facing the heat. And it's now getting near the end.
This is not just one isolated story. A lot of crypto startups and even the 3 years worth of established S Corps can collapse if they are playing with the govt regulations and also have no solid plan of monetization and growth.
So let's talk about if investment in the crypto startup is a good idea or not.
No Use Case, No investment.
A lot of coins and the blockchain project promise you "Universal Basic Income" to the poor. Some offer environment change, air cleanup and what not. New fake concepts are created to capture the investments of the venture capital rounds.
At the end it all comes down to the use case. If your product in the blockchain world has no use case then it's no investment at all. Because many developers and the teams are born to rug pull the public funding.
Crypto world sees such type of the project almost every other month.
If it's too good to be True.
I remember there used to be this "UBI" project. Where they promised the free money to the people. That token did not even have the 10 cent worth of value. But they used to airdrop it every thursday. And they took a lot of money from the venture capital.
Many names were changed for that project. It started from grant coin, mannabase and later it turned out to be something new. That scam is still going on outside and people continue to fall for it.
Poverty can't be removed by giving money for free. And UBI is a scam. If it's that too good to be true, it is going to be just another scam project.
Hold your Funds
Financial recession is like partial "Purge" like situation. Some continue to thrive on their passive investments but some of the people out there need money to survive. So many of such developers and the IT professionals are in process to sell MLM, Crypto and other projects to leech off each other.
Sane investor should be avoiding some of such issues during the crypto winter and the financial recession. If you want to do something good in near future, just keep your portfolio intact and avoid doing anything theatrix with the same.
Time to hold your fund and use it in the right place.
Startup world is crazy. And it's hard to trust the world that is out there asking for funding. Crypto projects are hard to verify for legitimate cause. And so it's safe to invest only when the dark clouds are set aside.
What do you think?
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