For starters, many digital currency exchanges are making an effort to avoid listing tokens that would be considered securities by U.S.
Some ICO whitepapers mention plans to list their digital tokens on exchanges, but why is this significant?
Whether thesis tokens get listed – and where – is very significant to investors because it can have a massive influence on the digital currency’s price.
If a digital token gets listed on one or more exchanges, its value could rise significantly. However, should it be listed on a major exchange like Coinbase, GDAX, or Bitfinex, its price could skyrocket.
Several exchanges have released the criteria they evaluate when considering whether to list digital currencies.
GDAX, an exchange run by Coinbase, released the Digital Asset Framework, which outlines the various factors the exchange looks at when determining whether suggesting a digital currency for trading makes sense.
The framework lists considerations such spil whether the digital currency would qualify spil a security under Coinbase guidelines, how much liquidity it has, and what exchanges trade the currency already.
At the time of report, GDAX only offers trading te four digital currencies: bitcoin, bitcoin contant, ether, and litecoin.
Bitfinex, another major exchange, has also provided specific guidance on how it selects digital tokens for trading.
“Several factors go into our decision-making process when considering adding a fresh token to Bitfinex,” the exchange’s webstek reads.
“Some of thesis factors include user requests, shareholder rente, market capitalization, token vormgeving parameters, and a thorough assessment of the token’s development process, including, but not limited to, the team behind the coin and their strategies for solving technical and nontechnical problems.”
Bitfinex offers more than 20 tokens for trading. Thesis include: bitcoin, bitcoin specie, Monero, IOTA, Dash, and Ripple.
Bittrex, another large exchange, has stated that it “looks for coins that have high community request, innovations to digital currency technology, or a contribution to science or humanity.”
Related movie: 8 Cryptocurrency Exchanges for Buying and Selling Fiat like USD to Bitcoin and Ethereum
This exchange is far more comprehensive ter its offerings, providing users the capability to trade hundreds of currency pairs.
What Investors Should Know
If you are interested te purchasing digital tokens that will likely get listed on exchanges, there are a few things to keep te mind.
- For starters, many digital currency exchanges are making an effort to avoid listing tokens that would be considered securities by U.S. regulators. Spil a result, consider sticking to “utility tokens,” meaning digital assets that are used to fulfill a specific purpose instead of serving spil a means of speculation.
- Investing ter digital currencies either during ICOs or shortly after thesis sales can generate compelling comes back, but liquidity is crucial. Spil a result, concentrate on tokens that you believe will love sustained request.
- Further, be sure to conduct the needed due diligence when evaluating the technology of any digital currency.
One good place to commence when evaluating token sales is our initial coin offerings pagina, where you will find information about such offerings.
Another good way to get helpful information is to subscribe to the Bitcoin Market Journal newsletter, which contains the latest news and updates on the digital currency space.