Bitcoin is becoming mainstream these days and top most choice for many investors for making investments and contribute a good portion of their portfolio allocation towards the same but still we see panic sell among these investors making the situations worse for market and for themselves also. So what are the main reason for these sell off ? Later on when they buy at peak and sell off at drop they think btc was not the right option for them but don't realize their mistake.Some common reasons for these are as follows:
1) People think Bitcoin as tool to become rich overnightThe main reason for people investing in bitcoin is that they see btc as tool to become rich overnight and according to them if they would invest $100 or $1000 in bitcoin it would be double or triple within days and when they see their investment going down next step they get nervous and want to safe themselves from any further loss.They see on news and article that btc is up 1200% this year and they think it will keep on rising and when this does not happen they panic sell and start dumping their coins.They need to be atleast have patience and know it will take certain time for btc to jump back.Apple,Microsoft and other shares have not make upto S&P 500 overnight but still bitcoin is keeping the pace very fast.
2) People ignore the volatility factor and past CrashesMany new investors enter the market in the investment hype and hope for steady rise and ignore the main
"Volatility" factor and it is the basic knowledge every investor must have prior investment.The volatility in crypto market is high and prices can fluctuates highly but when it goes down they start panicking and do the same mistake which is biggest mistake. Market have seen many dips and crash like situations but still they tend to ignore it and got nervous. They should see this chart history before any judgement:
When it have witnessed more than 70-80% crash in prices and still managed to rise to this level so why do panic sellers think it is bubble and will burst this time? It has been declared dead hundred times and still trading at $30k so if you underestimate it you will be in loss in future.
3) Whales manipulation and FUDThis is most common technique to create dump like situations in market to gain huge profits from this situation and accumulate more bitcoins at cheap prices.They spend rumours and create FUD in the market to which most of the newbies will get panic and start selling off and exactly same thing happens and the only ones who suffer loss out of this will be panic sellers.
WE ALL NEED TO TAKE INTO CONSIDERATION ALL THE FACTORS BEFORE INVESTING INTO BITCOIN AND HAVE PATIENCE FOR SOME TIME MOST IMPORTANTLY IN THESE DIPS SO THAT IT GET SOME REATAIL SUPPORT.
These are exactly the things that I have thought of too why newbies often lose their investment. Cryptocurrency has entered the mainstream media nowadays, which means more audience, more attention, and more potential investors. This has a good effect in our growing community. The many users we have, the higher supply and demand that will make the flow of the market spontaneous.
However, most newbies make mistakes. We can't deny that since we have once experienced to be an amateur and new in this platform. There are certainly room for errors for improvement, but it should be minimized as much as possible because we are talking about money here and not just some sort of game without big consequences. I agree on your list, but please allow me to share my thoughts about it as well.
I think one of the major reasons why newbies fall into the pit of their damnation is first, they enter without being equipped with the proper knowledge and understanding about cryptocurrency.
They are carried away with the hype over the internet. FOMO is their usual driving force the moment they entered crypto world.
They keep on thinking that crypto is a get-rich-quick-scheme, hence, they dived into it without even background checking what they're getting themselves into. As a result, they will mess up their funds because of lack of in depth knowledge.
Secondly, they are easily driven by fear, uncertainty, and doubt (FUD). Because they aren't aware about the crypto's run-around, they would experience anxiety and paranoia about the market status and their coin's value. Sudden price drops would easily shaken and weaken their heart to the point some would opt to sell right away without waiting the market to bounce back. They disregard the volatility nature of crypto because they aren't knowledgeable about it in the first place.
Lastly, most newbies rely on the other people's advices. They keep on listening and doing what other people is doing. Not thinking that there's no such thing as one solution, fixes all in crypto. Instead of doing their own technical and data analysis, they rely on gossips and baseless assumptions which often lead to nowhere good. In addition, the newbies are gullible and keeps on following the other's footsteps in expense of their funds security. That's why most often than not, they land on investment scams and schemes.
