The cryptocurrency market is actively developing and the rates on it are constantly growing. It is becoming increasingly difficult to mine top coins and filling a cryptocurrency portfolio is all the more expensive. Many investors are afraid to invest in cryptocurrency, because they are not sure that they will be able at least to recapture their investments. Many of them decide to invest in the so-called investment pool. Let’s consider its features in this article!
You need constantly monitor the market, be able to highlight trends and predict the development of the situation to recognize a cryptocurrency project that can actually fire.
We need not only theoretical knowledge, but also experience, which the beginners simply do not have. However, even for more experienced investors, it is difficult to make the right choice in the conditions of market overheating and an abundance of offers.
Even more difficult to find the right time to enter the market. This applies to the purchase and sale of cryptocurrency and participation in the ICO. Even the most worthwhile project may not bring the expected profit, if the time to participate in it is chosen correctly.
All this is based on the financial issue. It is difficult to count on a solid profit, having in your pocket $ 100. Most of the top projects (for example, ICO Telegram) can not be reached with such a sum – an admission ticket costs much more.
For example, they buy cheap altcoins, which can afford, but which do not bring them profit. They invest in little-known ICOs simply because they have a low entry bar. A cryptocurrency portfolio is filled with dubious tokens, hoping that at least one of them will shoot or carried on advertising and give their money to fraudsters.
If you do not take into account the talented traders who have managed to succeed alone, the income of an ordinary investor is small. Big profit begins where big money is spinning. However, what if they simply do not exist?
The term “pool” means the pooling of funds from different people for joint investment in the selected object (or objects), in the investment environment. Most often, these pools are used to invest in projects with a high bar of entry.
For example, one investor can not afford to invest 100 thousand dollars in a popular ICO. However, for a group of 100, 200 or 1000 people, this mission becomes quite possible.
Although the pool involves collective investment, all managerial decisions in it are made by the administrator (or administrators). There are elite pools that bring together wealthy investors, each of whom wants to have a word. In this case, decisions are made collectively.
However, a typical pool is a group of people who agree to the rules established by the administrator. He chooses what to invest in, collects funds from investors, launches them into circulation, and then distributes the profit among investors.
The amount of profit depends on the share in the total investment. For example, participant X invested $ 10 (10%), Y – $ 20 (20%), and Z – $ 70 (70%). Suppose this money brought $ 1000 in net profit. So X, Y and Z should get 1000, 2000 and 7000 dollars, respectively.
However, they will get less, because the administrator takes a percentage of the profits of the pool. This is his salary for the search and selection of investment objects. For example, if the commission is 20%, it will take $ 200, which will be deducted from the profits of X, Y and Z.
For example, a commission may be charged not from a profit, but from a fee of participants. Paying of the profit can be not one-time, but for a certain period of time, while the money is spinning in the project and generate income.
There is always the risk of fraud. Especially now when more and more inexperienced investors appear. How not to fall for scammers, we will tell at the end of the article. In the meantime, let’s see what kind of pools there are.
Pool members pass jointly collected funds to a large trader (or traders), who use them to make money on the exchange rate of top coins. Most often, the trader himself collects such a pool, administering it as an administrator. In fact, he collects money for a large-scale entry to the stock exchange and then distributes the profit to investors, taking their interest from each.
The scheme is not very common and quite risky, but with the right choice of a trader it is very convenient for beginning investors who are willing to invest in cryptocurrency, but do not know how to play the stock market.
Last year, many users invested in CoinValley – a project that, according to all its characteristics, falls under the definition of an investment pool to make money on trading. Moreover, at that time, pools were actively created to enter the CoinValley pool.
The first months, investors did receive interest on their deposits, but soon the payments stopped, and the project itself turned out to be a scam and is currently frozen.
However, similar pools operate today. You can find a lot of offers to “chip off” to collect a collective cryptocurrency portfolio for a month, a year or even several years in thematic blogs and forums like bitcointalk.org.
Such pools rent premises and equipment for mining in countries with cheap electricity and jointly invest in mining coins. That is, the investor simply gives money, while someone else gets the cryptocurrency and receives coins in accordance with the size of his contribution to the general cash register.
For example, according to this scheme, the BitClubNetwork pool works. Its team raises funds for mining BTC at mining farms in Iceland and promises its investors 80,200% per year. Investment package costs from 500 to 5000 dollars.
The most popular pools that unite investors to participate in large-scale projects with a high threshold of entry. As a rule, they enter all stages of an ICO, including closed rounds of pre-sale tokens.
For example, the European pool AntaresCapital is engaged in raising funds for participation in a closed ICO Telegram. Mere mortals can only apply for the purchase of tokens through American exchanges and only if they have 20 thousand dollars. The minimum threshold for entering the pool is only $ 100. In addition, the administration itself deals with all organizational matters.
A good pool offers schemes in which investor’s money works for a total profit. For example, they go to the purchase of top coins and the formation of a promising cryptocurrency portfolio.
However, many pools operate on the principle of financial pyramids, the entire profitability of which is based on attracting participants. New investors “pay” profits to those who came earlier and the owner of such a structure receives money from all participants.
Theoretically, the administrator can use the collected funds for purposes other than those agreed to by the pool members. In addition, he can hide the true size of the profits or set up the results of investing.
Therefore, it is very important to choose pools that provide complete reporting on funds raised, profits earned and payments made. As a rule, data is entered into a table that is accessible to registered pool members. If there is no such table or other reporting on the site, it is better to select another pool.
Bona fide administrators call only an approximate return (for example, 20–40% per year) and openly talk about the risks of investing. After all, even the most experienced analyst will not be able to predict with absolute precision how the chosen investment instrument will behave tomorrow.
Analyze the site of the pool according to standard criteria, does it use the secure htpps protocol, does it contain content, does it contain contacts for communication, and so on. Be sure to look for information about the creators of the pool, what they do, what is their experience in cryptocurrency investing, whether the pages are on social networks and on thematic forums.
A sign of a bona fide pool is the desire of the administration to provide as much information as possible to potential investors. They describe in detail when, where and why they offer to invest money.
Experts advise to choose those pools whose administrators themselves invest in projects proposed to investors. After all, then it turns out that everyone really cooks in a common pot.
After all, the pool member does not need to monitor the market, play on the stock exchange or mine the coins on his own. The main thing is to entrust your money to an experienced specialist who can competently dispose of them.