Is it all speculation ?

[amazonshrimp]

Hi,

I'm completely new to the topic (both investing and cryptos), and would like to know your opinion about investing in cryptos as of current.

How are you approaching investing in cryptos? Is your trading active based on technical analysis or are you putting money in cryptos for medium term ?I started reading about the topic and while active trading seems to be a great opportunity since you have daily swings of 10%, which can result in huge profits. On the other hand I am under the impression that investing long term is a guess work and this type of asset is not made for continous investing into it over a long term or is it ?

Probably not a lot of people suspected that as of 2021 Bitcoin would be as high as it is now and would continue to raise - is there a way to tell how will it behave in the future ? Bitcoin seems to have really broken into mainstream already, with big companies investing in it - is it a sign that the bubble will crash or is it increasing the credibility of the asset ? I would think the latter, but the common theme in any literature is that when an asset raises so high it becomes mainstream the bubble is about to burst.

How would such event affect other cryptos ?

Also how are you educating yourself in the topic and how to stay updated on the topic ?

While I have read some literature that gives an overview of what the technology is and why some cryptos are different from each other these publication don't really make it any easier to make a plan of actions regarding the current situation.

Appreciate your thoughts, thanks.

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[Lucius]

You ask questions that are very common for beginners, but it is difficult to give concrete answers to them, because no one knows what will happen in the future. I would therefore answer that the question of price is a combination of speculation and some facts from the past on which such speculation is based.

Trading with cryptocurrencies is very risky, precisely because of the high volatility that this market has - and it is true that big profits can be made there, but also that you can lose everything with one wrong decision. Few have the talent to trade, and even fewer have the perseverance and patience to be good at what they do.

I have to tell you that many assumed that 2021 would bring significant price growth, because it is part of a 4-year cycle that occurs every time halving occurs (every 210 000 blocks - 4 years), and last year halving just happened. What we may not have expected was that the price would be this high, but we could not have predicted that companies like Tesla or PayPal would join the crypto train.

It's good to educate yourself, just be careful from which sources you draw your knowledge - because there are a lot of those who just want to profit on the crypto wave without being able to be considered as experts to give anyone any advice at all. If you are interested in trading, I suggest you visit the forum Trading Discussion, and I believe you will find answers to many of your questions there.

As for speculation, we have that board as well - but don't take everything you read there as financial advice, everyone thinks in their own way, although often a lot of people can agree on an opinion.

[tranthidung]

How are you approaching investing in cryptos?

Fund allocation and strategies are important

Fund allocation

• Bitcoin is the main crypto in your portfolio: 70% to 80% for bitcoin.
• 20% - 30% for altcoins: 10% of it for risky altcoins that you afford to lose all. It is not a gamble but afford your loss at beginning.
• You can reshuffle your allocation between bitcoin and altcoin. In altcoin seasons, you can allocate more capital for altcoins but remember to switch it back to bitcoin after you take profits

Strategies

• Long term (more than 1 year): More than 50% of capital
• Medium term (3 to 6 months): 30% of capital
• Short term (1 to 4 weeks): 10% in maximum

[Coyster]

How are you approaching investing in cryptos? Is your trading active based on technical analysis or are you putting money in cryptos for medium term ?

There's a generally accepted mode of approach to investing in crypto, and it is adhering to the rule of thumb of "investing only what you know you can afford to lose", whether you're a long/short/medium term investor or even a trader, that axiom should come first before you take a decision in crypto.

On the other hand I am under the impression that investing long term is a guess work and this type of asset is not made for continous investing into it over a long term or is it ?

There are quite a lot of cryptocurrencies, many of which are shitcoins/pump and dump coins that aren't viable for the long term (I'm talking about Altcoins) but Bitcoin is, many early adopters of Bitcoin have been hodling for more than a decade now, plus new adopters, institutional investors, private businesses etc, all involved in the network, Btc is changing the monotonous financial system for good, acting as a hedge to fiat and offering control and freedom to it's users as well, if you also pay close attention to it's historical price movements then you'll understand why Bitcoin is a long term (or prolly even forever) coin/asset/investment/currency etc.

Bitcoin seems to have really broken into mainstream already, with big companies investing in it - is it a sign that the bubble will crash or is it increasing the credibility of the asset ? I would think the latter, but the common theme in any literature is that when an asset raises so high it becomes mainstream the bubble is about to burst.

Imo, there could be price corrections or a bear market, and it's nothing new; but the use of terms like "bubble..."burst" is pretty incorrect, it's obvious that the believe in the Bitcoin network is growing, cause if it's not, institutional investors wouldn't 'employ' it as a hedge to devaluing Fiat currency, Bitcoin will definitely move to mainstream adoption with bearish periods and price corrections along the way, but it's not a bubble that's going to burst.

[aoluain]

Probably not a lot of people suspected that as of 2021 Bitcoin would be as high as it is now and would continue to raise - is there a way to tell how will it behave in the future ? Bitcoin seems to have really broken into mainstream already, with big companies investing in it - is it a sign that the bubble will crash or is it increasing the credibility of the asset ? I would think the latter, but the common theme in any literature is that when an asset raises so high it becomes mainstream the bubble is about to burst.

We could argue that as of March 2020 Bitcoin became more than speculative.

Where else can anyone secure their wealth (any value) in the face of devaluing
FIAT and inflation?

Im sure there are lots of people who believe Bitcoin is in a bubble and that it will burst.
The fact that the price is so high, unbelievably high feeds this thinking but realistically
everything about Bitcoin, its features and benefits is what gives it its value

[amazonshrimp]

Imo, there could be price corrections or a bear market, and it's nothing new; but the use of terms like "bubble..."burst" is pretty incorrect, it's obvious that the believe in the Bitcoin network is growing, cause if it's not, institutional investors wouldn't 'employ' it as a hedge to devaluing Fiat currency, Bitcoin will definitely move to mainstream adoption with bearish periods and price corrections along the way, but it's not a bubble that's going to burst.

There two questions that bug me...First of all how can we tell how well priced bitcoin is at the moment ? There is little utility behind bitcoin and the value is created only from demand and trust of those who purchase, rather than from something tangible. It's not really possible to say we are at 60k right now but to be honest it's not worth that much is it?
On the other hand this makes it irrelevant how much bitcoin costs does it ? We are at 60k right now but we could as well be at 600k and it wouldn't make a difference to the demand would it ?
More and more people seem to perceive it as something stable, big companies invest in it, most fiat currencies are loosing purchasing power due to printout of money plus we are nearing the cap of bitcoin.

But what dangers are there for bitcoin ? Like government regulations  -  any attempt to undermine the bitcoin as it is an unregulated de-centralised currency or the fact that mining uses tons of energy which causes excess co2.

Don't you think that governments will be able to influence the value of bitcoin in the future or even ban it ? I am aware that in the past such operations were not succesfull (with gold for instance) but that doesn't mean it will never succeed.

[Pmalek]

What gives Bitcoin value is the fact that it's limited in supply. Fiat money can get printed every day. Bitcoin follows a pre-determined emission plan where a fixed amount of new coins gets generated with each new block that is mined. It puts the user in complete control of how he wants to spend the coins. You don't depend on a centralized institution to send you coins or ask you questions about its whereabouts. It's also transparent. Something you can't say about fiat.  

Regulating bitcoin by the government or trying to restrict users from transacting with known bitcoin services and companies by banking institutions are one of the dangers. But there will always be decentralized platforms and P2P trading that can't be fought as easily. Bitcoin is certainly not stable, it's a very volatile asset class. Certain countries have tried to ban Bitcoin, like India recently. I am not sure how successful they were with their actions. That is something best answered by those who live in India.  

[Caross]

It difficult to give a precise answer to this due to the bitcoin/cryptocurrency volatile nature which have made it difficult to be predicted.  One need to be careful in other not to jump in at the wrong time beca5we are in a bull season anything can happen.

[mk4]

How are you approaching investing in cryptos? Is your trading active based on technical analysis or are you putting money in cryptos for medium term ?I started reading about the topic and while active trading seems to be a great opportunity since you have daily swings of 10%, which can result in huge profits. On the other hand I am under the impression that investing long term is a guess work and this type of asset is not made for continous investing into it over a long term or is it ?

While I personally look at bitcoin as a better way of holding my wealth, people could look at it in any way they want. In fact, I don't even have any plans of selling(unless I suddenly need some cash) If they just want to trade it or invest in the short-mid term, sure let them do it. It's free markets! People can do whatever they want.

Probably not a lot of people suspected that as of 2021 Bitcoin would be as high as it is now and would continue to raise

Hah, in fact, a lot of people have been expecting this price rise. Quantitative easing, the block halving, government fiasco worldwide, pretty much the rise in price was almost inevitable.

is there a way to tell how will it behave in the future ?

As with any other asset, nope. Because while we can completely foresee Bitcoin's supply, we can't exactly foresee the demand.

Bitcoin seems to have really broken into mainstream already, with big companies investing in it - is it a sign that the bubble will crash or is it increasing the credibility of the asset ? I would think the latter, but the common theme in any literature is that when an asset raises so high it becomes mainstream the bubble is about to burst.

I mean, probably? If you meant a spike down in price temporarily, because bitcoin has popped multiple times already. But yet, 10+ years later, it's not dead.

How would such event affect other cryptos ?

If bitcoin dies, it's highly likely that it would near-kill the cryptocurrency industry.

Also how are you educating yourself in the topic and how to stay updated on the topic ?

Read, a lot, and watch interviews and podcasts and such.

[Coyster]

Don't you think that governments will be able to influence the value of bitcoin in the future or even ban it ? I am aware that in the past such operations were not succesfull (with gold for instance) but that doesn't mean it will never succeed.

Government can only influence the value of their Fiat, create inflation/hyperinflation, decide to print some more of it from thin air, etc cause they control it, all that isn't possible when Bitcoin is in the picture, government can't influence the value, they can't control it cause Bitcoin was designed to function without government (third party) interference. No government can generally ban Bitcoin, they could regulate it within their own jurisdiction and prolly ban it's usage there as well, but it's not possible to ban (stop) Bitcoin from operating, not even it's creator (Satoshi) has the power or wherewithal to do that.

But what dangers are there for bitcoin ? Like government regulations  -  any attempt to undermine the bitcoin as it is an unregulated de-centralised currency or the fact that mining uses tons of energy which causes excess co2.

Mining and whatever energy it uses poses no problems, the media prolly could be saying otherwise, but imo, that's only just for propaganda sake; Regulations have always been something Bitcoiners somewhat worry about, but that regulation is mostly only possible through centralized exchanges (services). Via third party services, government can get data of Bitcoin users and use it as they please, but such dangers can also be evaded, cause even in a country were Bitcoin is banned or regulated, citizens still run transactions with Bitcoin via P2p services, which is preferable for anonymity and privacy.

There two questions that bug me...First of all how can we tell how well priced bitcoin is at the moment ? There is little utility behind bitcoin and the value is created only from demand and trust of those who purchase, rather than from something tangible. It's not really possible to say we are at 60k right now but to be honest it's not worth that much is it?

Basically, Bitcoin is a decentralized currency, thus the best way to understand how "priced" is it is based on its adoption rate and the growing level of believe people have about Bitcoin, which unsurprisingly is skyrocketing atm, having said that Bitcoin's value being somewhat created from demand of it's users isn't a con, that's how the network was designed to be, if it wasn't that way then there will prolly be a body or 'government' ("something tangible") running it's affairs which will then only make it the very centralized "thing" we want to do away with. And Bitcoin is very well worth $60k cause that's how much you'll have to pay to acquire one of it right now.

On the other hand this makes it irrelevant how much bitcoin costs does it ? We are at 60k right now but we could as well be at 600k and it wouldn't make a difference to the demand would it ?

It would make a difference, if and when we're at 1btc=$600k, the demand will definitely be more than it is right now, we could prolly be at near-mainstream adoption then.

[pooya87]

It depends on what you mean by "cryptos".
Investing in altcoins is foolish in my opinion and trading them can not be based on technical analysis or anything that has any traces of logic in it because their markets are mostly manipulation and pump and dumps. So to trade and make profit one must look for the signs of market activity and pumper's involvement and then be quick at jumping ship before the same pumpers dump that altcoin and crash its price.

For bitcoin technical analysis works better since there is some logic in its rise and falls so both investing in it and trading bitcoin works better and has less risk.

is it a sign that the bubble will crash or is it increasing the credibility of the asset ?

Price being higher than some arbitrary number doesn't mean there is a bubble. In fact what you think is a bubble may be a "reverse bubble" meaning an undervalued bitcoin. For example people were calling bitcoin a bubble a couple of years ago when it was worth $6000 and now it is worth nearly 10 times more. Why? Because it was a reverse bubble that had to burst and price had to shoot up.

[cryptoaddictchie]

is there a way to tell how will it behave in the future ? Bitcoin seems to have really broken into mainstream already, with big companies investing in it - is it a sign that the bubble will crash or is it increasing the credibility of the asset?

I could say increasing the credibility. Before 2017 Hill run is quite different from now. As more institutional players joining the league and this time they are lining up and more interested than before. Who knows what could happen on bitcoin in the next few years. What is good is that it can influence other cryptocurrency to boost more and more profitable assets. Likely altcoins will be more profitable in short to medium run but if you are a long time holder then bitcoin is your bestfriend.

[hugeblack]

Investment is based on developing plans and strategies, which are built through study and analysis of all possible methods, and then you can develop your investment plan.
The investment will be profitable if you know how things are, and your loss will increase the more you do not know some things.
Currently, the best type of investment is DAC with selling when it achieves 10-30% gains and buying with 10-30% corrections.

[Smartvirus]

I find your questions sensitive and directional so, its a valued one and a need to know but then, not all can be given a concrete answer as, there is non for most. All you can get are speculations like your topic goes based on individual perception of the crypto space and the activities that occurs there in.

Well, no doubt the events as relates to the continous rise in bitcoin is a good one but never the less terrifying to investors with little fate in bitcoin when the thought of a big bubble comes to mind. So, it really becomes up to you on making your own analysis and developing your perception about the various activities and reactions coming off from individual investors.

I see the need for a bitcoin in our world, most hardwares often comes with a software. There is a hardware currency which is the fiat and as such, a software existence is a necessity for which bitcoin has filled in. Having 8nvestors troop in is simply a thing of an identified potential in bitcoin and cryptos. The fact that, bitcoin has a definite number is what guides against it from being a big bubble. There are miners that gets rewards for mining and fees on confirming a block. Should the last bitcoin be mined and there to be no more rewards, the miners would drop for sure but there are always going to be those that take consulate in the fees and as such, bitcoin stays protected.

Other technologies for the system would be bound to occur though.

[Unikon]

How are you approaching investing in cryptos?

Buy cheaper, sell higher. Don't listen to anyone else

[AakZaki]

How would such event affect other cryptos ?

Some people believe bitcoin is speculation, but I am not. Bitcoin is the future of money, with this consensus and public trust that will make it grow even bigger. Bitcoin is regulated about the amount in circulation, this makes it stronger than inflation like fiat currencies. The more days he will be more valuable, even though the value is not fixed. Regarding its effect on other coins, Bitcoin like a mother has a very influential effect on altcoins, when btc goes up, btc dominates down, altcoin will go up and vice versa.

Buy cheaper, sell higher. Don't listen to anyone else

It's not as easy as you say, everyone will be happy if you can do that. I am more profit oriented, so I thought buying and selling at the right time would be better. Then sometimes we also need to hear what other people say, just look at Elon Musk's tweet effect

[Taskford]

How are you approaching investing in cryptos?

Buy cheaper, sell higher. Don't listen to anyone else

If only those things are simple to execute then provably we are all rich for jusr doing buy cheap and sell higher, but in reality we need to burn our eyebrows to know how technical the market is and we need to learn the proper risk management so that we can see the good result on our trades.