Topic: How does speculation pump cryptocurrency market - page 2. (Read 264 times)

Speculation is just about guessing what the amount would be but that doesn't mean that it would be effective on the price, and speculation let's say people can say that bitcoin will hit $150,000 by the end of 2025 but if we get to 2025 the price might be above $150,000 maybe it will result in $250,000 at this point speculation does not give the actual price neither does it control the price but what really controls the price is the demand and supply. If the demand is high then there is every tendency for the price to boost such above expected but when the demand is low price wouldn't increase as expected maybe bad news hit the market the price might even fall lower although sometimes good news can effect the market positively for example; just as Donald Trump won the US election the victory also give rise to bitcoin price the way we didn't expect.

Firstly speculation doesn't just mean the act of buying and selling of a digit asset that ends up in profit, that's totally wrong of you.

in real sense speculation is the prediction, in other words, making hypothesis about anything when it's financial related or not with the hope that it moves towards a favourable coast. Just to be clear; speculation can be an assumption or a rumour especially when it has to do with finances but can still be disregarded as it's just an assumption without a solid reason or evidence to backup the claims.

having said this, speculation can be catalyst for a bullish or bearish movement of any crypto or financial assets as it's regarded as the same thing as rumour. Rumours in the crypto industry are very important as some time is the cause of volatility of an asset, for instance when bitcoin speculation is high that it will be bullish people might begin to buy out of FOMO causing the expected or speculated price to become a reality.

The potential risk or benefit of an investor is simply the same as the risk of buying any crypto asset. volatile is the biggest risk and at the same time the biggest favour for investors.

The risk is that it can lead to losses, and the benefit it's that it can lead to profit it's Viz vice.

I will give a very simple analogy, one that is used very often in trading.


The above is true very often in crypto markets. When there are a lot of traders that are bullish on any crypto token/coin, they can speculate on it by going long. And if there are more buys than sells, price ends up higher. The reverse is the case for bearish speculation and sentiment.

To put simply, if there are more people speculating about a specific price direction, they're inclined to trade in that direction and it becomes a self-fulfilling prophecy.

Here are some examples of the above:

— German government wanted to sell bitcoin, People speculated the price will be much lower than the price at the time. Result? Price moved from $66K to $48K because more people speculated the sells.

— Bitcoin ETFs speculations earlier this year:  A lot of people speculated it and the notion was that wall street being able to buy Bitcoin will be good pumpamenntals for Bitcoin's price. Result? Bitcoin never went below $20K since then.

— The recent HYPE airdrop from hyperLiquid: A lot of people (including myself) speculated that HyperLiquid not having any allocations for VCs and giving more to the hands of the community like Bitcoin did by putting the community first was the a major catalyst. Result? It launched yesterday and has been upONLY. A lot of millionaires made but not me as I'm still coming up lol.

If I bend down read this your post e dey look like say na trading you dey define as speculation but if I stand read am, e dey confuse my head scatter. Well wetin dey pump or dump cryptocurrency market na demand and supply and no be speculation. When many people demand the cryptocurrency because of the news wey them don hear, the price go go up which is wetin u dey call pump. On the other hand, when plenty people dey sell the cryptocurrency too, the price go go down and na wetin them dey call dump. Na for you to just know when to and which one to sell and when.

This your definition of speculation eh, e be as e get o. E no too enter like that but rather, e fit well as trading. Speculation no necessary mean say, you Dey buy or you Dey sell. You fit actually speculate and do nothing about am and the fact say, you do nothing no mean say, you never carry out the act of speculation. So then, watin con be speculation;

Speculation na the expectancy of price to do certain numbers on the charts, either towards the bulls or the bears. Na from there you go define your own entry or exit. You fit speculate based on watin you already Dey see Dey happen for market, using indicators and other analytical tools or you just blindly speculate. Anyone you use, na your matter.

How e take Dey affect traders;
Many people depend on analysis or read the chart through another person speculation. Why? Because then feel say, this person sabi pass me and e Dey more progressive or correct on en analysis. The thing there be say, no be only one person Dey think this way, people way get this same line of thought on dependency plenty. Na that plenty way them need to change trend direction.

The risk way Dey there be say;
E fit lead to market manipulation even though e no easy like that and na mostly traders with low capital Dey suffer am. Whales na them Dey for the end of the matter and na to chop you be that o.

First u need to ask wetin bitcoin speculation be. So if u know wetin e be, you go understand say the influence of speculations na to creat awareness mostly social, media and political events specifying the potentials of bitcoin. E fit be positive or negative news Speculations.
So the force of the speculations fit attract more investors and the values of adoptors investments fit trigger the market pump. Much so even big institutions and persons way foresee the speculations being true matters get possessions way fit make holders buy huge amount of bitcoin that way get muscle way fit cause market increase.



Investors potential risks no fit dey specific other than that,  investors potential risk fit be when they only follows the speculations without working out to know the reality of how bitcoin dey work such as those who dey easy to careless with their wallet private keys and fallen into the hand of frauds and also those who think the crypto market such as bitcoin na quick rich investment so the disappointments they faces fot be their own potential risks when them adopt bitcoin way them never prepare their minds to accept anything way fit happen if them invest on bitcoin just because of the news them dey hear and we know say some Speculations has false onto say na guess we dey guess about the future price of bitcoin.

As everyone here believed and know that speculation is the act that deals with buying and selling of a digital assets which result in expectation of profits,however with the prices fluctuating hastily,cryptocurrency can be highly volatile,moreover i learnt that the major factor that contributes to volatility is speculation,then how does speculation pump cryptocurrency market?
What will be the potential risk or benefits of investors?

Your helpful contributions will be appreciated.