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The Northern Trust Company, a 129-year-old financial institution managing over $10 trillion in assets, has dipped its big toe in cryptocurrency.
With rabid speculation going on in the market, Northern Trust had to do something about it. But the trust is not taking cryptocurrency directly just yet; it will work through some hedge funds for now.
That's because digital coins are not real money, and most of the cryptocurrencies have crashed and burned already. Here are the main reasons they fail:
No. 1 - No Regulation
So far, the federal government has not regulated ICOs -- the IPO equivalent for initial coin offerings. New digital coins go on sale faster than the government can count them.
"Regulators may, of course, find a way to regulate ICOs, but it will take time," John Wasik wrote for Forbes. "In the interim, it's the Wild West."
No. 2 - Many Scams
Like the Wild West, anybody with a gun can rob a bank. It's almost as easy to pull off a cryptocurrency scam like Giza.
"The fake startup ended up running off with $2 million of investor money," CNBC reported. "Still, many advocates see a future for ICOs as an alternative to initial public offerings and venture capital funding."
No. 3 - It's Too Easy
Easy-come, easy-go was a thing a long time ago. What makes it different in the digital age is the mouse-click.
Although investors can turn real money into ethereal coins by simply pushing a button, failing to research a cryptocurrency before investing just isn't smart. Who are the founders? What do analysts say? Has the company made any real money?
Wasik, author of 16 books on wealth and innovation, said another reason cryptocurrencies fail is greed. But you already knew that.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.