The boom of technological innovations and creativity in the financial sphere has given us numerous interesting and beneficial concepts. One the more recent among them is the idea of collective investments (i.e. crowdfunding). In fact, crowdfunding platforms have become very popular in the last few years, with the crowdfunding market growing by almost 50% globally each year. Moreover, 2019 saw the emergence of several new players, and many FinTechs are hoping to get in and carve out their place in the growing market. But does this mean that a crowdfunding boom is in our future?
While it very well may be, there are a number of things that need to be figured out before it becomes a standard place to invest substantial amounts, including regulatory issues, taxation issues, making easy-to-understand portfolios and how to handle delinquencies and defaults. That is not to say that crowdfunding should be avoided completely. In fact, it is likely to become a great investment tool in the near future. For now, however, investors need to realize that there is a moderate-to-high risk in such investments and that it should not be the only place where investments are made. Regardless, the future looks bright for crowdfunding.