Hi All,
I'm new to crypto trading and learning quickly but I would really like to get some takes on this from those who've been in it a while..
I have a lot of talks with people and read a lot of things from those in the traditional financial sectors who try and approach crypto trading in the same manner as the stock market. (They are often the ones saying things like "but this isn't real money... there's nothing to back it, etc...) and as I'm immersing myself more and more into the crypto markets, I feel as though I'm seeing signs of new money flowing in, from people who are also trying to analyze projects, the way you would a newly public company to understand it's current and it's future growth potential.. (I feel like this is why despite the unpopularity of XRP in principle to crypto enthusiasts, it is being bought and the price is going up.) When I try and use this logic, I find countless altcoins that seem to offer nothing tangible, they are simply regurgitating the same thing about a decentralized, secure currency, etc.. At times I've done a lot of digging on a particular company that I'm hearing a lot of chatter on only to find out that there's absolutely nothing of worth to this company and the people who founded it have no justification in having an ICO in the first place..
On the other hand, I see massive amounts of money being made off (what appears to be) nothing more than pump and dump trends... I told someone the other day that I think if I invested $5000 into $100 increments on every newly listed coin currently selling for fractions of a penny, I'd likely lose out on the majority of them, but there is an extremely high likelihood that at least 1 or maybe even a couple, that would jump 10000%....so - I just spent $5000, and now I have $1million.. am I overly simplifying this?? Don't the past statistics support this logic? (not saying my exact numbers are correct but you get the point.)
I read the other day that over 90% of crypto traders are like 18-30 years old and have no experience in traditional investing at all.. if that's the case, won't that sway the markets and prices, much more than project evaluation??
Curious to get anyone's thoughts on this..
I think the lack of response answers a lot of your questions. And thank you for a thoughtful post, it's pretty rare here.
I'm on the same boat. I've been trying to do what might be termed the 'correct' way of investing which I think includes analyzing projects or companies. And then there's trading which I think should not be confused with investing, that's where the speculating, pump and dump come in.
In the end I don't think the trading and speculating part is any different from what's happening in the traditional stock market. Only the currency is different, everything else applies, just as it won't give you a higher percentage of winning if you made a bet with the US dollar or Bitcoin - correct me if I'm wrong.
With that in mind I think your '$5000 - $1 million' logic is spot on, only that there's a chance you won't win at all, sometimes you lose them all. But you only lose if you sell at a loss. If trading is your aim then selling as soon as the price goes up as opposed to holding is where you make money - its an obvious statement but sometimes we get the investing and trading mixed up, thinking that if we hold longer we'll make even more money. So timing is everything holds true.
Speaking of timing, I've been reading that it seems that's where the problem lies. It seems that sometimes exchanges can't execute a trade quick enough and giving how volatile the market is money can be made and lost there. And also exchanges blocking accounts when there's an ongoing order, a $1000 capital can go down pretty quickly.
In the end I agree that the market is volatile in part due to the speculative nature and the people behind it. But I still think that there are real [high-potential] companies that an investor can get behind and make money with the growth of the said company. I guess you just pick how you want to make money.