Review INGOT COIN
Current
Challenges in Financial & Crypto Markets
Present-day financial
services mainly consist of financing, investment management & advisory,
trading and insurance. When it comes to trading and financing, the current
financial system lacks in efficiency and transparency. The market entry
complications that are facing investors and the service fees that they are
charged are quite substantial, which is why some of these investors get
discouraged from actively participating in the current market. Additionally,
smaller investors get overlooked in favor of bigger and wealthier investors and
thus, combined with the lack of trust in the markets that increased after the
2008 crisis, the global financial market is prevented from reaching optimal
efficiency.
Lack
of connection between Crypto and Traditional Markets
The crypto and the
traditional financial markets are quite segregated for a participant attempting
to cross over or move their capital from one market to the other. The
segregation is a result of large transaction costs, time and money. These costs
sometimes lead to the eradication of profits, and in some cases lead to losses,
which restricts investors from participating in the market. Furthermore, Market
participants are always searching for ways to diversify their funds, along with
rebalancing them to reach an ideal allocation of assets that fits their risk
appetite. Given the lack of connection between crypto and the traditional
markets, participants are either unable to move funds between different markets
in a reasonable timespan or are restricted by the costs associated to do so.
The current crossover
mechanism is also inefficient in terms of availability and transparency as it
is only available 5 days a week and execution can take from hours to days
depending on different factors, such as liquidity, day of execution, time of
execution throughout the day, type of order and size of trade.
Current
Market Ineffective Structure
Time is of extremely high
value for people who engage in trading or seek financing. Unfortunately, due to
having a highly centralized data processing structure in the financial world, a
great deal of time will be lost, leading to loss in lead and edge.
Additionally, local compliance standards such as KYC and AML are in some cases
irrelevant or outdated when trying to comply with international compliance
standards. Thus, causing significant complications for foreign investors who
are looking for exposure to the local markets.
High
Fees in Financial Markets
A large number of
intermediaries such as primary banks, brokerage firms and intermediary banks
are usually involved in trading and financing activities, which means that high
fees are being deducted from investors on multiple stages. Excessive bank and
brokerage fees can be unattractive and debilitating for investors looking to
access different markets.
Impractical
Crypto Exit Strategies
Transferring funds in
bull markets is quite hard, never mind in bear markets. We have seen the drop
in crypto prices in late 2017 and how it impacted a lot of crypto participants
as they were either unable to liquidate their tokens into other financial
instruments or were forced to pay large fees to do so. Until recently, the
worry of an inefficient exit strategy in the Crypto market was disregarded,
especially when prices were soaring. As more investors, institutions, and funds
started participating, it has become apparent that neither the traditional
financial system nor the crypto market can establish a direct connection
between the two. Many enterprises across various industries now accept and
store cryptocurrency as a method of payment in order to keep up with
competition and increasing demand, but unfortunately most are unable to
moderate their exposure and risk.
Lack
of trust in Crypto Markets
The difficulty of
transferring current holdings to the crypto markets in terms of
diversification, liquidity, bias to price discrimination and lack of
consistently available market services, has deemed the exponentially growing
market unreliable to prospective participants and in turn limiting them from
entering. Moreover, the lack of knowledge in the market about blockchain, smart
contracts and the variety of possible useful implications, have caused the
participants to turn down profitable investment opportunities.
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