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March 15, 2014, 05:16:25 AM |
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Hey folks,
It seems many people are interested to know a bit more whats going on with crypto coins markets. Therefore I decided to post some observations.
1. Some large multi pools mine various coins for brief period of time when diff and price ratio make those coins very profitable. Then coins are sold all at once into BTC or LTC, mainly BTC. Selling all coins at once dampen the price temporarily and may create expectancy of another dump in near future. Large pools say 60 GH Scrypt are able to mine large amount of coins at once.
How to deal with it - communication - communicate value of coins you have to miners at multipools. Also coins mined by multi pools are top profitability wise so likely to have success factor carrying them further and new difficulty adjustment code is likely to significantly reduce multi pools advantage.
2. Developers, large holders or many small holders sometimes selling most of their coins at once. While less likely than previous factor it can happen.
How to deal with it - look for the coins with vibrant community and perhaps talk to developer to see whats up.
3. Government pressure on exchanges to close down.
How to deal with it - check on the exchange jurisdiction, perhaps in places like Iceland they are more likely to operate freely.
4. New exchange is fake and many coins are gone.
How to deal with it - keep coins in your wallet after exchange is done. Fiat - perhaps store it with most established exchanges like btc-e, bearing in mind that due to factor 3 coins may be temp gone and it can take time to prove their ownership.
5. Some group of people starts buying alot of coins, advertising and so on.
How to deal with it - analyze market data.
And yes it pays to remember that each coin bough may go up or down based on variety of factors.
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