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April 10, 2013, 01:11:05 AM |
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Been here before. This is classic psychology, were in the greed phase. If it makes 10% a day you would be a fool not to stay in.
The rise is because large investors are putting in 100K-500K and pushing the price up on a consistent basis. After they make 20% they want out as they did well.
Here's the problem....If you have 10,000 bitcoins right now(and many professional investors now do) how could you sell them? And who will be the first to try to sell. This would crash the market, then the masses see the price has peaked and want out at the "TOP" too. Masses sell and price falls fast.
Price falling fast all the late adopters and large speculators rush to the exit. They discover an elephant cannot exit through a small door.
Then the news media catch the story of someone who maxed out their credit cards and took a home equity loan at $75 who has now sold at $50 and lost much of their money.
Panic calms over the next week bitcoin drops 5% month for a year and levels out at $20-45. Lots of greedy people lost their money and refuse to sell at a loss.
Everyone is jealous of the man who sold two pizzas for 10,000 bitcoin, the problem is he sold these for $25(in total the next day). Nobody but a Russian banker who bought at 45 and sold at 150 made any real money.
Bitcoin creates no INCOME, its just a measure of trade. It can't ever produce income, so don't treat it as a source of income and you wont get burned.
Be the one who sold too early, have a great story over poker, and buy your friends a beer. Don't be the poor sap who maxed his credit lines and at one time made $250,000 in profit but forgot to sell.
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