Why Did Many Personal Investors Fail In The Cryptocurrency Market?
By Blockbuster Blockchain on ALTCOIN MAGAZINE
Amongst many of your friends or family, if they had invested in Bitcoin, Ripple, or any cryptocurrency back in 2017 and 2018 winter, they could have walked away with 5x or 10x of their money or with nothing. However, the majority of investors in cryptocurrency could have failed after buying cryptocurrencies at their all-time high. So, if you have ever wondered, “What if I had invested in cryptocurrency right before its price went up?”. At the same time, investing just for the sake of investing to earn easy money would be risking the investment capital. You need to understand what led personal investors to fail back then and even now.
The cryptocurrency market has many similarities with the stock market. People are trading assets(coins/cryptocurrencies) of different companies for their intrinsic value. While you may question, “Does cryptocurrency even have any intrinsic value without a physical form?”. After all, you do not want to invest in something you do not know about. The general rule of thumb in investing in any asset for a return of investment(ROI) is to understand where you are putting your money into. The stock market is different because there are many institutional traders and people understanding what the company values are.
On the other hand, there are fewer people analyzing cryptocurrencies and their future value. Regardless, in both the cryptocurrency and stock market, many people often follow the news and irrationally purchase assets in the hope of multiplying wealth. This was the general sentiment in the cryptocurrency market, allowing for a terrible bear market for over a year. As the prevalent market sentiment towards cryptocurrencies was more similar to a gamble than an investment, price fluctuations were too drastic. BTC prices would double or halve in a matter of hours. Any investment without thorough due-diligence is guaranteed to fail.
To succeed in 2019 with investments in cryptocurrency, you need to ensure three things: disciplined trade, thorough research, and personal strategy. Learning the strategies to ensure those three general principles will allow you to succeed in any trading cryptocurrency or stocks.
Writer: Yunsoo Kim
Re-(E)Think, COO | RichValley, Inc. Director | Yale NUS ’23
