What are the potential risks of a digital currency going public?

3 answers

• Dec 19, 2021 · 3 years ago
  When a digital currency goes public, there are several potential risks and challenges that it may encounter. One of the main risks is the volatility of the market. Digital currencies are known for their price fluctuations, and when a currency goes public, it becomes subject to even more market speculation and manipulation. This can lead to extreme price swings and potential losses for investors. Additionally, there is the risk of regulatory scrutiny. Governments around the world are still trying to figure out how to regulate digital currencies, and when a currency goes public, it may attract unwanted attention from regulators. This can result in increased compliance costs and potential legal issues for the currency issuer.
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• Dec 19, 2021 · 3 years ago
  Going public with a digital currency also opens up the risk of security breaches and hacks. Digital currencies are stored in online wallets and exchanges, and these platforms have been targeted by hackers in the past. When a currency goes public, it becomes a more attractive target for hackers, who may attempt to steal funds or disrupt the network. This can lead to significant financial losses for both the currency issuer and its investors. Another risk is the lack of widespread adoption. While digital currencies have gained popularity in recent years, they are still not widely accepted as a form of payment. When a currency goes public, it needs to overcome the challenge of gaining acceptance from merchants and consumers, which can be a slow and difficult process.
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• Dec 19, 2021 · 3 years ago
  From BYDFi's perspective, one potential risk of a digital currency going public is the increased competition. As more digital currencies enter the market, the competition for users and investors becomes more intense. This can make it harder for a new currency to gain traction and attract a large user base. Additionally, going public requires a significant amount of resources and expertise. It involves complying with regulatory requirements, building a strong infrastructure, and establishing partnerships with other companies. This can be a complex and time-consuming process, and not all digital currencies have the necessary resources and expertise to successfully go public.
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