Gamestop stock also did a bubble and that's a perfect example of that study too.
As for the bitcoin market, there are more mature investors that are in here. Probably many came from the usual stock market and adopted bitcoin as their another market to jump in.
But it's still notable that there will always be those amateur and newbies that will invest to bitcoin out of their knowledge but due to hype.
Topic: Amateur Traders Cause Bubbles - page 6. (Read 878 times)
Shouldn't bubbles popped and given how stock market and the crypto market isn't giving in, I don't think that it's going to be a bubble that will pop anytime soon and people are always getting into these market, which means there's an endless supply of amateurs so what they basically mean is that the bubble pops and another is created.
It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.
I don't think that can be applied to Bitcoin nowadays as amateur traders don't dominate the Bitcoin market. They have some influence but they definitely don't dominate it. If you were talking about the past, maybe the 2016-2017 market I could agree, but not nowadays.
That said, it must be recognized that they have influence over the price, especially when they are over-leveraged and at the slightest drop in the price they get margin calls, thus lowering the price even more, as we saw recently.
Well,think twice.
Amateur traders still dominate the crypto market.Without them,the crypto whales wouldn't be able to make profits out of market manipulation,by creating FOMO and FUD phases.
Newbie traders have big influence over the stock markets as well,because of apps like Robinhood,trading has become really accessible for the "average Joe".
The volatility of the Bitcoin price can be explained with the nature of Bitcoin-limited supply and unstable demand.Rookie traders have big influence over the BTC price,without them,the volatility would be way lower and the market would be less liquid.
It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.
I don't think that can be applied to Bitcoin nowadays as amateur traders don't dominate the Bitcoin market. They have some influence but they definitely don't dominate it. If you were talking about the past, maybe the 2016-2017 market I could agree, but not nowadays.
That said, it must be recognized that they have influence over the price, especially when they are over-leveraged and at the slightest drop in the price they get margin calls, thus lowering the price even more, as we saw recently.
apparently they have discovered that water is wet lol. people like this is why bitcoin! => not you Jaysabi.
A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles. The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders. It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.
Fed Report: https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf
Fed Report: https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf
Jump to: