Topic: Amateur Traders Cause Bubbles (Read 878 times)
It's an inevitable scenario to be honest. Because every day, we have many more new investors in this market. And majority of them don't do a comprehensive research about the market and the cryptocurrencies. They start investing into something like this and they're instantly becoming a potential panic-seller. When we see big dumps in the market, they panic and sell their investments right away. And this causes the price of the coin to come down more.
Amateur traders cause some hype and disturbance in the market, causing other experienced traders to reel them in even further and create a market scenario which will attract the newbies, causing them to invest more and more in the market. This results to a bubble, which everyone enjoys. We can see this on a few altcoin examples quite often. After the hype has died, the price will normalize, and a lot of the same newbies reeled in by the bubble will just leave the market with empty pockets.
amateur traders dominate the market? It will not happen.
their number may indeed be large, but the assets they have are not much. I agree with you, asset bubbles occur because they only keep the assets they have for granted. but unfortunately that will not happen because forever the market will be dominated by professional traders with very large assets.
their number may indeed be large, but the assets they have are not much. I agree with you, asset bubbles occur because they only keep the assets they have for granted. but unfortunately that will not happen because forever the market will be dominated by professional traders with very large assets.
And what sort of definition are they giving for a bubble?
I'd actually say that amateur traders a lot of times can support rational price discovery. BTC is a prime example of this. Was there any investment bank that was willing to back BTC at the beginning, if not for a few 'amateur' bagholders who stuck it out? Probably not.
Sure, you could argue that bubbles could form. But given the amount of bubbles that institutions have been a part of (real estate, dotcom bubble, etc.), amateur/retail investors can hardly be given the blame for the consequences.
I'd actually say that amateur traders a lot of times can support rational price discovery. BTC is a prime example of this. Was there any investment bank that was willing to back BTC at the beginning, if not for a few 'amateur' bagholders who stuck it out? Probably not.
Sure, you could argue that bubbles could form. But given the amount of bubbles that institutions have been a part of (real estate, dotcom bubble, etc.), amateur/retail investors can hardly be given the blame for the consequences.
BTC price has never been rational because it's not based on anything other than speculation, so that's not a convincing argument that amateur traders support price discovery and actually works directly against the notion. And institutional involvement in anything is guaranteed once a certain critical mass is reached, that also says nothing about the price being supportable and less than purely speculative.
The definition of bubble is self-evident; unsupported price appreciation that's not tied to fundamental value. Amateur traders were directly responsible for the dotcom bubble and the real estate bubble because they FOMOed into assets that had no technical basis to be as high as they were. The crypto bubbles that sprout and pop are just another in a long line of data points supporting the original thesis.
The cryptocurrency market will be replenished with newbie traders for a long time to come, because not a very large number of people have cryptocurrency and even fewer even periodically trade in this market. Therefore, the reserve for such a replenishment is very significant, especially if the popularity of the cryptocurrency continues to grow. It cannot be denied that beginners will always have a certain influence on the cryptocurrency market.
Eventually that number will stop. For example there are "new" investors in gold every year as well, people who are growing older enough to have money to buy those things, and people who are too old eventually die and they are gone so they are no longer buyers, whereas new kids that became adult replace them. However that is no longer a big number, we do not have too much difference between old buyers dying and new kids becoming adults and buying, the difference between them is tiny.It means in the gold market we do not have constant new comers that increase the price, of course the price still usually goes up because it is valuable and dollar is worthless so each year dollar gets closer to toilet paper value and gold is still very valuable so the price goes up, but not because of newcomers. Bitcoin will eventually reach that level, we will not have this many newcomers in a year. Not these days, but maybe in a decade or two later.
The subject is quite true because I still believe I was one of them who used to be a part of the bubble creation when I started trading back 7-8 months ago. But soon I stopped it and increased my time to learn from fellow traders. So, I think there will be more people like me as a newbie or amateur who do such acts while trading to create or help in creating a bubble because obviously, we were not the only factors contributing to the bubble.
and I think it is a natural action because our psychology is still in the adaptation stage. actually there is an advantage if a bubble occurs, a large market movement will automatically occur, so we can take advantage of it and find it easy to find the right position to invest. In the selection process, not everyone like you can adapt and evaluate it 
And what sort of definition are they giving for a bubble?
I'd actually say that amateur traders a lot of times can support rational price discovery. BTC is a prime example of this. Was there any investment bank that was willing to back BTC at the beginning, if not for a few 'amateur' bagholders who stuck it out? Probably not.
Sure, you could argue that bubbles could form. But given the amount of bubbles that institutions have been a part of (real estate, dotcom bubble, etc.), amateur/retail investors can hardly be given the blame for the consequences.
I'd actually say that amateur traders a lot of times can support rational price discovery. BTC is a prime example of this. Was there any investment bank that was willing to back BTC at the beginning, if not for a few 'amateur' bagholders who stuck it out? Probably not.
Sure, you could argue that bubbles could form. But given the amount of bubbles that institutions have been a part of (real estate, dotcom bubble, etc.), amateur/retail investors can hardly be given the blame for the consequences.
The subject is quite true because I still believe I was one of them who used to be a part of the bubble creation when I started trading back 7-8 months ago. But soon I stopped it and increased my time to learn from fellow traders. So, I think there will be more people like me as a newbie or amateur who do such acts while trading to create or help in creating a bubble because obviously, we were not the only factors contributing to the bubble.
Bubbles popped and never recover, so your claim that amateurs causing the bubble is already not true. Maybe they can cause the prices to go down really at an erratic pace since they have a varying level on how they trade so the movement is affected little by little.
If a market dominated by amateur traders cause bubbles in asset even with the low level of experience and inability to maintain a steady winning trade. Then what would be said of professional traders. From my own view I was thinking professional traders should rather cause asset bubbles since the understand how price flows at every state of the market structure.
You are maybe right in some different cases and markets but not bitcoin. I believe, bitcoin can not be dominated by the amateurs. However, according to what I know more than 90 percent of traders are actually amateur traders, no matter what they think. These newbies are usually holding a little amount of money but even these little amount of money can make the market fall/rise. That's why, In some cases people believe newbies can cause price bubbles in the markets.
The cryptocurrency market will be replenished with newbie traders for a long time to come, because not a very large number of people have cryptocurrency and even fewer even periodically trade in this market. Therefore, the reserve for such a replenishment is very significant, especially if the popularity of the cryptocurrency continues to grow. It cannot be denied that beginners will always have a certain influence on the cryptocurrency market. I think bubbles is good for the market until you are caught on the wrong side of the pump. 
Newbies don't stay glued to the market the way we all do here 247, hence the moment they hear or observe that the crypto maket has captured the attention of the public, that's when most of them remove their money from savings and push them into bitcoin, the moment they all realise that the market is already over bought or the hype began to fade away, they tend to sell back and cahsout out their capital and profit which always lead to heavy fall and huge volatility.
Newbies don't stay glued to the market the way we all do here 247, hence the moment they hear or observe that the crypto maket has captured the attention of the public, that's when most of them remove their money from savings and push them into bitcoin, the moment they all realise that the market is already over bought or the hype began to fade away, they tend to sell back and cahsout out their capital and profit which always lead to heavy fall and huge volatility.
Bubbles definitely aren't good for a market. A bubble is an unsupportable price for an asset that does not reflect real world utility or value, so when they form it distorts the market and interrupts meaningful information about price from being discerned. In an efficient market, bubbles don't form, but to the point of this study, amateur traders are not efficient and their lack of knowledge is what drives bubbles and distorts the market, with bad consequences for the overall market through the knock on effects of their distortion.
There are a lot of bubbles in crypto right now thanks to newbie traders. A lot of them are putting money into meme coins and scams. I do not see these bubbles bursting all at once because there are just too many tokens out there. As long as they don't all go down simultaneously then the overall market will be fine but we will have some volatility.
The crypto market is growing rapidly over the last 12 months. Do amateurs really have enough money to create bubbles? We are seeing more and more institutional investors in the crypto market who invest millions. While I think that amateur traders play a part in a bubble, there are not the main reason. Also amateur traders usually just follow more experienced traders.
They keep following those big players and ended up losing their money, each time whales start moving those
who intends to ride with them are the one who mostly losses their money, unknowingly take part of that market
movement they are unaware with how things will turn out.
I think bubbles is good for the market until you are caught on the wrong side of the pump.
I don't think it is, the fact that it's called a bubble, it doesn't do good for the reputation of the market as it will make most people lose their money when they are eager to invest blindly. People invest because they believe on the project, and they expect the project to grow consistently, not on a pump and dump situation.
Amateur traders usually go down to the well with the rope of others. Most of them listen others whisper to buy or sell. So others shitty ideas becomes theirs bubbles. When the shitty bubbles burst they learn painfully what they must to do.
Happens with the altcoins - dont you think? I have seen and heard many altcoin shills stay in their bubbles and keep buying more shitcoins only to increase their stock but not having any gains - a continuous cycle of despair.In that sense, buying bitcoin is better for sanity. You can see the importance bitcoin is gaining from the mainstream world and you can also see the complete lack of importance being given to shitcoins, but which I mean the coins that do not fall in the top-10 list on CMC.
There are a lot of bubbles in crypto right now thanks to newbie traders. A lot of them are putting money into meme coins and scams. I do not see these bubbles bursting all at once because there are just too many tokens out there. As long as they don't all go down simultaneously then the overall market will be fine but we will have some volatility.
I would say, this happens always whenever there is a bitcoin craze. People read news and come in to buy bitcoin but find its price "too high" because they never cared to look into it when the market was bearish and hence they settle with some shitcoin. Mainly the ones being promoted at the same time, which you have correctly mentioned. 
The reason bubbles for amateur traders is that they come to the market without knowing anything about the market. In case of retention of currencies if their value decreases then loss occurs later since it is often difficult to observe the underlying values in real life markets bubbles are often decidedly identified only in the previous region once prices suddenly fluctuate prices can fluctuate unintentionally and it becomes impossible to predict from supply and demand alone. You need to understand the volatility of the market before looking if you have to learn you have to overcome the loss.
There are a lot of bubbles in crypto right now thanks to newbie traders. A lot of them are putting money into meme coins and scams. I do not see these bubbles bursting all at once because there are just too many tokens out there. As long as they don't all go down simultaneously then the overall market will be fine but we will have some volatility.
It looks very much like a "study of British scientists" ... Amateur traders can only bring a pool of assets that will become hostages of bubbles that deliberately suit those "who are not customary to talk about on the crypto market." In short, the idea in the title looks like an attempt to find those who are "to blame for everything", except for the real culprits
Bubbles are fine, as much as crashes are fine as well. These type of market movements have to happen and it is normal. By the way as far as I know a "bubble" is a major major deal, it should not be used this lightly, like the first I can think of was the tulip bubble as everyone knows, (well mansa musa dropping gold prices a ton in Egypt probably is the first one we know) and that literally destroyed some of the wealthiest people in Netherlands, because they made horrible mistakes, at some point a tulip was worth a house is no joke, it is real but what house? Not a castle for sure, just a small tiny town house for one type of deal probably at best.
Long story short bubbles are major, like 2008 crash was so big that just because american banks lost money, there were tons of nations that bankrupted like Greece and Spain, THATS bubble. Bitcoin is not in a bubble, was not in a bubble and hopefully will not be in a bubble as well.
Long story short bubbles are major, like 2008 crash was so big that just because american banks lost money, there were tons of nations that bankrupted like Greece and Spain, THATS bubble. Bitcoin is not in a bubble, was not in a bubble and hopefully will not be in a bubble as well.
How can they distinguish a Amateur trader? looking at their account transactions ? what if they have just created new account to hide their personality? remember that in crypto trading anonymity is one of the most concern mate so this can be a not completely truthful study.
though There is also a cause of the bubble when those Manipulator take place things that many denied happening but it is indeed reality.
i guess they could say it because amateurs and being professional are different words but if we look on the definition of amatuers ,though There is also a cause of the bubble when those Manipulator take place things that many denied happening but it is indeed reality.
it was said that some amateurs can be good too .
i would not put all the blame on them but manipulation is the real one that cause a bubble . manipulation has never been a good thing into this market .
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