THE AMP cryptocurrency has increased in popularity recently, pushing up its value by almost 900% this year alone.
We explain what you need to know about the cryptocurrency and what investors should be aware of.
Before you think of investing money, keep in mind that cryptocurrencies are highly volatile and you may lose all the cash you put in.
It's not a guaranteed way to make money, and you should never put more cash than you can afford to lose or into something you don't understand.
Newer cryptocurrencies are also riskier than more established ones, such as Bitcoin, and make you more open to scams.
If things go wrong, you'll also struggle to get help due to the lack of regulation for cryptocurrency firms.
5 risks of crypto investments
BELOW we round up five risks of investing in cryptocurrencies.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
What is AMP crypto?
AMP is a digital collateral token, which is said to offer quick and verifiable assurances for any kind of value transfer.
The aim is to reduce the cost of interchange between parties in payment transactions and remove the likelihood of fraud.
Users can stake AMP tokens to guarantee any form of financial exchange, such as digital payments, currency exchange and loan payments.
As collateral, AMP insures the value of any transfer while it remains unconfirmed – a process which can take seconds or days, Myron Jobson, personal finance campaigner of Interactive Investor, told The Sun.
This means that if the payment takes too long or fails, AMP collateral can be liquidated to cover the costs – so the vendor still gets paid, he added.
The AMP token was launched in September 2020 and is built on the Ethereum blockchain.
How much is AMP crypto worth?
The price of AMP is currently sitting at $0.05691 – up by 3.20% over the past 24 hours, according to CoinMarketCap.
In comparison, it was worth a lower $0.00584 at the end of January this year.
AMP's spike in popularity follows its listing on Coinbase in early June.
Mr Jobson said: "'Only invest in things you understand’ is an adage worth remembering here.
"If you don’t understand the mechanics of an investment and what good and bad looks like, you are essentially investing on a wing and a prayer.
"The workings AMP are not easily discernible to the everyday investor, and explanations on the crypto’s official website aren’t easy to understand.
"For most investors, sticking to mainstream investments is the best strategy."
We explain what you need to know about the Tiger King crypto and Dogecoin spin-off Baby Doge.
Dogecoin surged in value last week after Elon Musk supported an "important" change to slash crypto transaction fees by 100 times.
Meanwhile, investors were recently warned about cryptocurrency trading platforms Bitcoin Rush and Bitcoin Storm.
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