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Opportunities and risks of the crypto-active market!

The growth and consolidation of Web 3.0 will further boost business involving the cryptoactive market. The trend is for cryptocurrencies to continue to become more popular and tokens to gain more space in sectors of the economy.

Digital currencies, besides being a (highly speculative) investment, are growing as a means of payment in various places around the world, including Brazil – and we are already the fifth largest country in number of payment token users.

As for asset tokens, the expansion is more significant, creating a vast universe of investments and sandbox initiatives by the Central Bank and the CVM, which help strengthen tokenization in the Brazilian market.

There are many opportunities for crypto-activities, but as with any financial product, challenges are also present.

Is it worth investing in crypto-actives?

BLOCKBR, a web 3.0 native company, will show you the positives and negatives of cryptocurrencies and tokens to help your investment strategy!

OPPORTUNITIES TO INVEST IN CRYPTO-ACTIVES

Let’s talk about factors that demonstrate how crypto-activities generate revenue and increase business efficiency.

OPERATIONAL COST REDUCTION

The concept of decentralization – using the cryptoactive without regulatory control and trading directly with buyers and investors – and popularization are the great differentiators of crypto-actives.

Companies can implement payment tokens as a means of payment and reduce costs with bank fees and intermediation expenses. As for business tokens, the offerings have a lower cost than traditional means of investment – banks, brokerage houses, and finance companies.

For customers, there is the benefit of paying tax-free purchases on international purchases, especially IOF on credit cards.

INCREASED FUNDRAISING

A strategy widely used by companies to balance the cash and capitalize expansion projects is fundraising, which in the traditional market has a high cost and a lower liquidity.

With tokenization, it is possible to fraction the offering into low-value shares, which helps to attract more public, especially small investors, who form a considerable slice of the market and look for opportunities that the conventional market does not offer.

With this, it is possible to obtain a more liquid operation and a higher fundraising value by increasing the value of the shares.

MORE PROFITABILITY

This is the direct consequence of the reduced cost of cryptocurrency receivables transactions and the higher capital charge when offering the assets in tokens.

RANGE OF INVESTMENTS

The general public can find several tokenized projects to invest in, from the most well-known in the traditional financial market, such as security tokens – stocks, debentures, futures rights – to the more innovative ones, such as tokenized crops and tokenized investment fund shares.

This has a major positive effect on the market and allows people to buy tokens for low amounts, create their first investment basket, and grow over time!

CHALLENGES OF THE CRYPTO-ACTIVE MARKET

There is no 100% safe investment, because the capital market and all the conjunctural factors that will influence it – inflation and sectorial crises are just some of them – are extremely dynamic, especially in the Brazilian economy.

Therefore, we will highlight some risks of investing in crypto-assets and we will be able to see that most of them can be mitigated with essential care actions for those who are going to start investing.

RISK OF ILLEGALITY

Although crypto-activities are still seen by many people as an illegal investment, this is an incorrect view: financial digital assets are subject to the Civil Code and the laws governing crowdfunding projects.

Therefore, there is a legal due process against abuses and crimes. Anyway, as in every economic activity, it is fundamental to be careful when buying tokens to avoid companies that do not exist or that form financial pyramids.

MARKET RISKS

LACK OF REGULATION

Here, the good news is the approval of the Bitcoin Law (as it was baptized) in the House of Representatives, which will create a series of regulations for the cryptocurrency market and make it legally safer, with control mechanisms and criminal classification.

Crypto brokerages will be able to operate and individuals and companies will be able to transact payment tokens more smoothly. Although the law deals only with cryptocurrencies, business tokens will benefit because they are cryptoactive assets backed by products and projects.

The forecast is for presidential sanction in the last quarter of 2022 and until this happens, the tip is the same as in the previous item!

MARKET RISKS

These challenges are intrinsic to the type of financial product. Just as a company’s stock is a high-risk and volatile asset, real estate is at the opposite extreme, but has low liquidity.

Cryptocurrencies fall into the equities group and should be viewed with caution by those without a bold investor profile. Tokens are the value representation of an asset or right for offering purposes, so you need to evaluate the profitability, liquidity, and volatility of the project itself.

Here it is important to take two steps to invest:

  • Follow the fluctuations of the markets where the tokens you want or are already investing in are located;
  • Develop an investor mentality. In this way, your analyses will be oriented to the opportunities and risks of the projects, and you will be able to invest in the one that meets your profile.

PROJECT FAILURE

This risk is concentrated in asset token offerings and is related to errors in valuations, among them:

  • Market size;
  • Potential audience;
  • Pricing;
  • Supply delay in seasonal projects.

This can cause difficulties with liquidity or supply value revisions with costs already absorbed, causing loss of profitability.

Partner with a qualified and experienced tokenization company , as they will put focus on all these and other issues surrounding a product launch – which an asset token is in practice!

IS IT WORTH INVESTING IN THIS MARKET?

It certainly does!

As we can see, the opportunities with crypto-actives are many and new ones are always emerging, because that is the essence of crypto-actives: revolutionizing the way we buy, do business, and invest, and allowing new possibilities to happen.

The challenges of crypto-actives also exist, but most are inherent to financial products, whether cryptocurrency or token. In all cases, the challenges will not even arise if we adopt the care that every traditional investment also requires.

This way, you will have security, confidence, and will be able to invest in assets with great earning perspectives!


BLOCKBR Digital Assets
is a web 3.0 native fintech that brings together technological innovation and digital knowledge to transform physical assets into digital assets, in the process of tokenizing assets.

The supply of physical assets and tokenized financial assets, both current and new, is democratic and decentralized, which makes the way of investing safe, simpler and more efficient.

We enable, structure, issue and offer tokens on our platform and beyond. Be aware that tokens depend on feasibility and regulatory factors.

Do you want to tokenize your business or part of it? Do you have a business solution and does it make sense to issue your own token ?

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