Are you a bitcoin investor? Do you ever feel stupid because of your investment? If yes, you are one of the thousands of intelligent investors who have felt dumb post their cryptocurrency investments. Most investors are unable to chart the movements of the coin.
Only recently, the price of bitcoin reached an all-time high of $20,000. Soon, after that, the prices came tumbling down, wiping off at least $160 billion of market value. The same happened with Ripple.
The price of this crypto went to an all-time high, even making its founder the richest person on earth shortly. However, the prices fell embarrassingly low soon after, shaving off more than 50% of the gains within just one month.
What went wrong with the investments?
Cryptocurrencies are unlike anything that we have witnessed till date and they are still growing. The crypto market is in a very nascent stage, which means that there will be many disruptions and scaling opportunities. These ups and downs can be seen with the high volatility in the markets.
Two weeks ago, after falling down to $10,000 bitcoin was showing signs of a bullish reversal. Analysts were sure that the trends will change in favor of the bulls as the $10,000 resistance continued.
However, soon after British PM Theresa May suggested that there should be regulations for these coins, it started falling again, breaking all resistance at $9,000 and even $8000.
What makes investors feel stupid?
The aggressive volatility of the coin is one of the reasons why investors don’t understand what to expect from bitcoin, or any cryptocurrency in general. Bitcoin, the maiden cryptocurrency has seen many huge falls but equally great rises in the past. Investors are often in a dilemma- whether to exit their positions or wait for the next highs.
Another thing about crypto coins is rising skepticism about their use. Many investors compare their crypto holdings against traditional investments. They are unable to answer simple questions about the currencies. For example, the underlying tech for cryptos is blockchain technology.
While many organizations and governments like the idea of blockchains, they dislike crypto coins and want to regulate them strictly. On the other hand, they don’t know who is running bitcoin.
While other cryptocurrencies are managed by companies/organizations/group of developers, nobody knows who Satoshi Nakamoto- the founder of bitcoin is, and if he is even a real person.
As bitcoin is the most important crypto asset with investors, not knowing where it came from is a big red flag for several investors. Those who invest in bitcoin often ponder if they are participating in a Ponzi scheme.
If such a Ponzi scheme is proven, the smartest trumpet-blowers of cryptocurrencies will be proven wrong. Investors are worried if they will look stupid to the people around them.
They are worried that a traditional investor like Warren Buffet, who never meddled in the bitcoin affair will adopt the ‘I told you so’ attitude.
We cannot predict where the crypto markets will go next. Some people are expecting a massive fall and some others are calling it the biggest scam in the world. There are still many hopefuls who expect cryptos to become mainstream soon.
If you are one of the few hopefuls, you may seem stupid to everyone around. Hold on, you could be right.