That is what you get with a unregulated market. The cryptocurrency market does not have full regulations like stocks and forex. Scams and PnDs typically get attracted to unregulated markets; so that is what it comes with.
However, there is something that doesn’t change a thing between cryptocurrency market and stock/fx market. Thats called research & due diligence. You should always do your research on anything you plan on investing.
The big question is; will it be regulated in the future? I really don’t know. Regulation does not get implemented fast. It takes lots of time. There are many area’s that need to be covered first before market regulation. Such taxation & enforcement, licenses & permits and than comes market regulations. To give you a better idea of the current situations. Bitcoin and others are taxed (capital gains) and it varies in different countries. There are already licenses and permits emerging such as a bitlicense, which exchanges in the US must possess. There are some ICO’s that got busted by the SEC. So as you can tell; it seems like their working on it.
As for a shortcut to filter those cryptocurrencies out. I would suggest you stick to using Coinbase / GDAX as an exchange because they have to comply with US laws to keep their bitlicense and to operate in the US. They currently only support BTC, ETH and LTC. If that isn’t enough to float your boat, then I’d suggest doing some research only on VDA’s. Many will probably dislike me for this, but I left bitfinex for this exact reason. They started supporting cryptocurrencies that are overly volitile and non-established cryptocurrencies. You might be different. Although, the biggest advice I can really give you is to always do lots of research before investing.
Leaving Bitfinex was a great idea, with the fraudulent Tether fiasco and convenient ‚hack‘ that took place right after the situation began to have some light shown on it.
With so many coins flourishing in this ‚wild west‘ that allege to have so many varied purposes doing A LOT of research is necessary. Some scams, some legitimate; find out as much as possible for yourself about who is behind them. IOTA has numerous red flags and issues but I hope in the future they can hold true. Bitcoin is held aloft by belief, like all the best pyramid schemes. LTC is neat but Charlie Lee makes me wary with childish tweets. Ripple is a company based in California that has been around for awhile who are working with regulations and have a mighty crew of talented and established people, in addition to reputable investors – but XRP comes heavily under fire by the rest of the community for having banks as a customer, even though remaining decentralized.
Long term, the right ones depend on having a real world purpose.
I’d go with the original bitcoin. If the hype train slows down, i am betting it will hold its value way better than all the clones and offsprings.
That said, factor in the risk that even bitcoin could go up in smoke. Or reach to the moon. Who knows. But i am not counting on it to store value and eventually bounce back the way most blue chip stocks will.
look at the people behind them and the organizations, Projects like Ethereum has many institutional and reputable investors invested and projects like IOTA has a non profit foundation registered in germany. IOTA has links to united nation projects, and NGO projects. List of IOTA partnerships with companies.
I don’t think cryptocurrency is a buy and hold long term. Do we buy and hold dollars or euros? With that said, money is to be made in the process of establishing the next big currency. Cryptocurrency also does have some utility contrary to popular opinion.