[2017-07-17] Cryptocurrency and Market Timing Irrationality

[Chase]

Cryptocurrency and Market Timing Irrationality

It is pretty safe to say that the majority of new investors in cryptocurrency are there because they have heard of the amazing profits earned by other investors. Even though they may be warned of the potential risks and wild volatility, many come to expect nothing but gains, and are not prepared psychologically for any downturns or losses. In our world of instant gratification, they want the gains to happen now, and pay little heed to what it actually takes to build something of value. Everything is fine as long as the market is rising, but panic sets in every time the price falls. It happens over and over…

Herd Mentality

It starts with herd mentality – following the latest ICO, or a flashy new blockchain project looking for a problem to solve, or any other venture with a lot of hype surrounding it...


Read full story: http://dnotesedu.com/2017/07/cryptocurrency-market-timing-irrationality/

[1715068954]

1715068954

[1715068954]

1715068954

[1715068954]

1715068954

[iamTom123]

We should really expect that a good percentage of Bitcoin holders are actually newbies into the business and they can easily be influenced by anything they might read or heard about Bitcoin. These people can easily panic and unload their Bitcoin hoard into exchanges.

However, as we are all dreaming to go mainstream, it would be impossible to filter people and we have to understand that it is anybody's right to panic and to do whatever he/she wants to do with the coin one is holding. Or maybe we all need to undergo first a much-needed Bitcoin trading education first.

Now, since there is nothing we can do about this, we might as well accept the fact that anytime there can be a problem with Bitcoin there would always be market panic and sell-off.

[Chase]

We should really expect that a good percentage of Bitcoin holders are actually newbies into the business and they can easily be influenced by anything they might read or heard about Bitcoin. These people can easily panic and unload their Bitcoin hoard into exchanges.

However, as we are all dreaming to go mainstream, it would be impossible to filter people and we have to understand that it is anybody's right to panic and to do whatever he/she wants to do with the coin one is holding. Or maybe we all need to undergo first a much-needed Bitcoin trading education first.

Now, since there is nothing we can do about this, we might as well accept the fact that anytime there can be a problem with Bitcoin there would always be market panic and sell-off.

"We should really expect that a good percentage of Bitcoin holders are actually newbies into the business and they can easily be influenced by anything they might read or heard about Bitcoin." -
 That was mentioned several times in the article, only referring to all cryptocurrencies.

"However, as we are all dreaming to go mainstream, it would be impossible to filter people and we have to understand that it is anybody's right to panic and to do whatever he/she wants to do with the coin one is holding."  -  There will likely be only 5% of all cryptocurrencies, tokens, ICO's, etc, etc, that will be successful, and dreaming will have nothing to do with it. Without new people adopting cryptocurrency, there will be NO mainstream adoption. The intention of the article was not to stifle anyone's rights (although I don't know of any constitution that has the right to panic in it), but rather an educational article to help people understand the volatility aspect of cryptocurrency and how they can still effectively invest in markets like this.

"Now, since there is nothing we can do about this, we might as well accept the fact that anytime there can be a problem with Bitcoin there would always be market panic and sell-off." - The article was not about the market effects of a panic and sell-off, it was about investor psychology, risk tolerance/intolerance, identifying unproductive emotional responses, and to put it bluntly, not following sheep.

[buwaytress]

"Beware of claims of great returns earned by timing the market, made by anyone that is earning a commission on your trades"

Taken out of a non-crypto market context maybe? Hardly anyone making claims on this forum is earning commission from trading, if anyone at all. None of the exchangers I know or use use an affiliate system either.

[Chase]

"Beware of claims of great returns earned by timing the market, made by anyone that is earning a commission on your trades"

Taken out of a non-crypto market context maybe? Hardly anyone making claims on this forum is earning commission from trading, if anyone at all. None of the exchangers I know or use use an affiliate system either.

"Taken out of a non-crypto market context maybe?" - Yes, it was just general market timing advice... for now. It won't be long before financial advisors/brokers are 'advising' (term used very loosely - lol) to move in and out of various cryptocurrencies and blockchain-based companies, charging a commission on each move. The people currently in cryptocurrency will have no need for this type of service, but it is necessary for the mainstream public. They need to be aware that these advisors/brokers may not always have their best interests at heart, if they are getting paid every time their client switches investments.