Amateur Traders Cause Bubbles

[jaysabi]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

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[Nhazwrath]

apparently they have discovered that water is wet lol.  people like this is why bitcoin! => not you Jaysabi. 

[Poker Player]

 It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

I don't think that can be applied to Bitcoin nowadays as amateur traders don't dominate the Bitcoin market. They have some influence but they definitely don't dominate it. If you were talking about the past, maybe the 2016-2017 market I could agree, but not nowadays.

That said, it must be recognized that they have influence over the price, especially when they are over-leveraged and at the slightest drop in the price they get margin calls, thus lowering the price even more, as we saw recently.

[davis196]

 It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

I don't think that can be applied to Bitcoin nowadays as amateur traders don't dominate the Bitcoin market. They have some influence but they definitely don't dominate it. If you were talking about the past, maybe the 2016-2017 market I could agree, but not nowadays.

That said, it must be recognized that they have influence over the price, especially when they are over-leveraged and at the slightest drop in the price they get margin calls, thus lowering the price even more, as we saw recently.

Well,think twice.
Amateur traders still dominate the crypto market.Without them,the crypto whales wouldn't be able to make profits out of market manipulation,by creating FOMO and FUD phases.
Newbie traders have big influence over the stock markets as well,because of apps like Robinhood,trading has become really accessible for the "average Joe".
The volatility of the Bitcoin price can be explained with the nature of Bitcoin-limited supply and unstable demand.Rookie traders have big influence over the BTC price,without them,the volatility would be way lower and the market would be less liquid.

[Obito]

Shouldn't bubbles popped and given how stock market and the crypto market isn't giving in, I don't think that it's going to be a bubble that will pop anytime soon and people are always getting into these market, which means there's an endless supply of amateurs so what they basically mean is that the bubble pops and another is created.

[jossiel]

Gamestop stock also did a bubble and that's a perfect example of that study too.

As for the bitcoin market, there are more mature investors that are in here. Probably many came from the usual stock market and adopted bitcoin as their another market to jump in.

But it's still notable that there will always be those amateur and newbies that will invest to bitcoin out of their knowledge but due to hype.

[NeuroticFish]

Amateur traders are subject to FUD and make the growth be bigger and the fall deeper. But they are not trend setters and they don't have the power to create bubbles.
My guess would be that certain big players stay unidentified and got wrongly assimilated with the amateurs. But it's only a guess.

[michellee]

Amateur traders follow what other people say on social media without research of what they should do related to the current situation in the market. It is dangerous for them because they will not make a profit, making other traders panic if the price is suddenly getting down. We can not stop them from doing that, but we can suggest they calm down if the market is down so they do not make a wrong decision and try to analyze more to find the other information. Hopefully, the amateur traders can hold their emotion and always think twice before deciding.

[Wind_FURY]

OP, it’s very easy to blame “amateurs”/plebs, but it’s really leverage, derivatives, futures, and low liquidity that’s the main causes of bubbles. Bitcoin’s current level of liquidity today, if you remove leverage, derivatives/futures GAMBLING, it might cause bubbles to form more slowly/more controlled.

[paxmao]

Well that is not really true. One of the best known bubbles out there, the "dot com bubble" was not created by people who in theory did not know what they were doing, but rather by large investment firms and large investor who just did not want to miss out on the huge internet revolution. Lots of money was lost and a large chunk of it was not the newcomer´s but rather some very speculative yet professional funds trying to get a foot in the future without any understanding of what the future was like and ignoring some critical aspects, such as the need of a company to eventually be able to produce some income.

As of today, the crowds money can only move stock with very limited liquidity. They tried a Silver squeeze and failed.

[Leviathan.007]

You are maybe right in some different cases and markets but not bitcoin. I believe, bitcoin can not be dominated by the amateurs. However, according to what I know more than 90 percent of traders are actually amateur traders, no matter what they think. These newbies are usually holding a little amount of money but even these little amount of money can make the market fall/rise. That's why, In some cases people believe newbies can cause price bubbles in the markets.

[oHnK]

Well that is not really true. One of the best known bubbles out there, the "dot com bubble" was not created by people who in theory did not know what they were doing, but rather by large investment firms and large investor who just did not want to miss out on the huge internet revolution. Lots of money was lost and a large chunk of it was not the newcomer´s but rather some very speculative yet professional funds trying to get a foot in the future without any understanding of what the future was like and ignoring some critical aspects, such as the need of a company to eventually be able to produce some income.

As of today, the crowds money can only move stock with very limited liquidity. They tried a Silver squeeze and failed.

Yes I agree, bubbles are not made by those who are amateurs but those who are experts in investment management and have big pockets.  They can only spread rumors directly to move the market so that the market can be more manipulative because of them.  This is where the amateur traders, they become supporters of the issue so that it becomes a bubble.  They are not the main factor but only the supporting.  The intelligence actors are still big-pocketed players with their investment knowledge.

[palle11]

Amateur traders are subject to FUD and make the growth be bigger and the fall deeper. But they are not trend setters and they don't have the power to create bubbles.

But to the contrary I think they can set a new trend. As you mentioned that that are subject to FUD and that means they can trade in panic, so if it happens the fear a spike and starts trading with the spike, that can change direction of price and at same time , a fundamental can hit the spike to happen, it is possible to totally change price direction. You already know that fundamental or news can be a reason to see huge spikes. Spikes that happens in a longtime hour like week or in the monthly candle is possible that trend will change to the direction of amateur.

[fiulpro]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

But aren't people using this bubble for their own benefits? It's honestly the way people make money through cryptocurrencies. For me the Volatility is a positive thing if you know how to use it.

See when you learn anything it takes time and effort. If the amateur traders are engaging in trading they are learning a lot !! Soon enough they will have adequate experience and good strategy.

Now, study says a lot of things. Plus what do they intend to do using this study ? Ban amateur traders? Have them give a test to see who is intellectual and who is simple ?

According to my opinion,
Let this study be a study and don't think much about it, it's not worth our time.

[joniboini]

IMO retail and amateur traders are probably the right choice. Not all retail traders are amateurs, but they the most active market traders (or one of them). In addition to that, the market movement can badly affect them, so they have to be sensitive to market movement and usually fall into fomo or bear trap. Does bubbles their fault? Not entirely. The big players are the ones who create the rumours and news, so I don't think you can blame them.

[int03h]

Gamestop stock also did a bubble and that's a perfect example of that study too.

As for the bitcoin market, there are more mature investors that are in here. Probably many came from the usual stock market and adopted bitcoin as their another market to jump in.

But it's still notable that there will always be those amateur and newbies that will invest to bitcoin out of their knowledge but due to hype.

It was the word FOMO that caused the crypto bubble. That's also why altcoins that have raised ICOs, IDOs, IEOs since first listing on exchanges always have a "^" chart. The value was pushed up too high, the decline was prolonged, and it was difficult to recover the value of the life safety that they had achieved.
Retail investors are easily swayed by the news but that shouldn't be the reason for the market's deep drop as they tend to buy more than sell (from my observations).

[The Sceptical Chymist]

apparently they have discovered that water is wet lol.  people like this is why bitcoin! => not you Jaysabi. 

Seriously--that fact has been known for decades and has been written about for almost 100 years, if not longer (I've only read about the 1929 crash from books of that period, but there have been bubbles way before that). 

And yeah, it's true.  Those "amateur investors" tend to want to get in on any trend that they think will make them rich quick.  The problem is that by the time they do buy whatever's hot, it's too late.  The smart money has already been invested in the asset and will be the first money out when the market peaks.  It was true for comic books and internet stocks in the 1990s, real estate in 2006, gold in 2011...and the list could go on and on.  This isn't exactly a ground-breaking piece of writing by any means, and frankly it's not even worth discussing since it's hard to argue against it.

[RealMalatesta]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

It is not the amateur traders, it is the hype that causes it, hype makes even the veterans act as if they have never traded before and that is why it is not a good deal for anyone. I personally went for it as well and I have been here for 8 years, that is why I do not think that it will matter if you are a newbie or a veteran because as long as there is a hype around crypto there will be people who make that kind of price changes in the end and cause it to go up way too much.

I know it is not that simple, I know that it is going to be a bit of a challenge but in the end we are talking about something that is as profitable as it gets so why would veterans stay away while newbies take all the profits? Which is why veterans join the party as well. This is all of our problem, I like bubbles in crypto because it is a HUGE profit, but when it falls I am fine with that as well.

[Coroline]

 It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

I don't think that can be applied to Bitcoin nowadays as amateur traders don't dominate the Bitcoin market. They have some influence but they definitely don't dominate it. If you were talking about the past, maybe the 2016-2017 market I could agree, but not nowadays.

That said, it must be recognized that they have influence over the price, especially when they are over-leveraged and at the slightest drop in the price they get margin calls, thus lowering the price even more, as we saw recently.

Well,think twice.
Amateur traders still dominate the crypto market.Without them,the crypto whales wouldn't be able to make profits out of market manipulation,by creating FOMO and FUD phases.
Newbie traders have big influence over the stock markets as well,because of apps like Robinhood,trading has become really accessible for the "average Joe".
The volatility of the Bitcoin price can be explained with the nature of Bitcoin-limited supply and unstable demand.Rookie traders have big influence over the BTC price,without them,the volatility would be way lower and the market would be less liquid.

Yes, it's like that, it's easier for novice players to play with their emotions, as at the beginning of this year a billionaire expressed his interest in the crypto world, beginners began to be interested in it but a few months later the billionaire expressed his unfriendliness to mining and beginners began to release their assets. A real stupid act.

[fara_buduk]

It's true that amateurs are more emotional, less cautious and tend to follow price trends without carefully watching and reading technical price movements, but these can't create bubbles. because they are only part of it, unlike whales and bears they are very likely to make it with experience and influence

[MCobian]

It's true that amateurs are more emotional, less cautious and tend to follow price trends without carefully watching and reading technical price movements, but these can't create bubbles. because they are only part of it, unlike whales and bears they are very likely to make it with experience and influence

Bubbles occur not only because amateurs buy without doing research and analysis first. But what causes the bubbles is actually the whales that
manipulate the price, most of the whales are very experienced. So they can take advantage of the emotions and stupidity of amateurs to create FOMO,
in the end a lot of amateurs buy at peak prices. The conclusion is that bubbles occur from various factors, so don't completely blame amateur traders.

[Hydrogen]

The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  

A classic example of that could be the well publicized fall of enron. Amateur investors threw mountains of money at it. While many professionals stayed away suspecting that something about their numbers didn't add up. Eventually, accusations of accounting fraud surfaced and were investigated. Game over.

The trend of amateur investors having the liquidity to influence markets may have reversed awhile ago with the trend of amateur investors having reduced savings and disposable income. Statistics relating to the number of people who live paycheck to paycheck have risen significantly. The average amount of savings people have. And similar numbers have declined over time. Leading to that demographic being far less relevant in the investment and trading world.

Central banks like the federal reserve have come to dominate trading volume in US bond, currency and stock markets in recent years.

[spacelens]

That's absolutely true. Most often it's the amateurs who pay the price when bubbles burst. If you look at the longevity measured in decades of professional investors and traders vs. amateurs, you see that the odds are in favor of those who have a better access, more information, and can move important amount of funds to impact certain markets.

It's true that amateurs are more emotional, less cautious and tend to follow price trends without carefully watching and reading technical price movements, but these can't create bubbles. because they are only part of it, unlike whales and bears they are very likely to make it with experience and influence

Bubbles occur not only because amateurs buy without doing research and analysis first. But what causes the bubbles is actually the whales that
manipulate the price, most of the whales are very experienced. So they can take advantage of the emotions and stupidity of amateurs to create FOMO,
in the end a lot of amateurs buy at peak prices. The conclusion is that bubbles occur from various factors, so don't completely blame amateur traders.

[hatshepsut93]

I think even if Bitcoin was dominated by pro traders, it would still be prone to bubbles, just with smaller magnitude. Bitcoin is not a stock or a bond, there's no way to calculate its value, it's all just guesswork. How much value should be added to Bitcoin based on El Salvador adoption? 5%? 20%? There's no answer to that, it's just feelings. Add here the novelty factor that is still present, as Bitcoin is still having "first times" - first wave of institutional adoption, first time legal tender, and there's even more reason why the price is so subjective.

[Chato1977]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

But is this available also for Bitcoin or in crypto? we all knew that Newbies are very rare in this market and they are not entering in Bulk instead there are very few of them that will invest and they are not even capacitated in making a bubble.

[TheUltraElite]

we all knew that Newbies are very rare in this market and they are not entering in Bulk instead there are very few of them that will invest and they are not even capacitated in making a bubble.

Newbies are the ones who take the fall in the whale game. If there is no new money coming in then how to do you explain the increasing market capitalization of bitcoin or for that sense altcoins too?

The growing interest in crypto added with the news media's sudden change of stance from "Why you should not invest in bitcoin" to "10 reasons for investing in bitcoin" - does bring in a lot of newbie meat into the market. Those who are unable to buy gold or stocks will try something alternative and the answer quickly ends up in bitcoin.

Point is that the whales need a place to dump their shitload. So the newbies are the ones. If they dont do the FOMO/FUD the cycles will become slowed. Lack of prior trading knowledge or knowledge of speculative markets makes them susceptible to manipulated markets.

[semobo]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

Amateur traders causing the bubble to burst but they are not the one getting benefited from it, they always on the losing side because they sell when market dumps and buy when market bumps.

Every professional trader was once a noob who lost their money while trading as well.

[NeuroticFish]

But to the contrary I think they can set a new trend. As you mentioned that that are subject to FUD and that means they can trade in panic, so if it happens the fear a spike and starts trading with the spike, that can change direction of price and at same time , a fundamental can hit the spike to happen, it is possible to totally change price direction. You already know that fundamental or news can be a reason to see huge spikes. Spikes that happens in a longtime hour like week or in the monthly candle is possible that trend will change to the direction of amateur.

Even newbie trader wannabes know that "the trend is your friend" and it's counterproductive to piss against the wind.
So FUD and panic will not make them sell if the price is growing, for example. Just my 2 satoshi... but yeah, no worries, I don't expect everybody agree with me 

[ethereumhunter]

It's true that amateurs are more emotional, less cautious and tend to follow price trends without carefully watching and reading technical price movements, but these can't create bubbles. because they are only part of it, unlike whales and bears they are very likely to make it with experience and influence

I guess not just the amateurs can be more emotional because traders who have experience can also get panic or too emotional, especially they see the price can jump fast to the high or low price. It is normal to see we are panic because we never know when the price will move and what will happen later. But yes, the amateurs will cause bubbles because they do not analyze more to find the way to solve that.

[mu_enrico]

We used to the well-known phrases: smart money and dumb money, not necessarily all amateurs are categorized as dumb money.
But yeah, dumb money will contribute to any assets bubbles and they will be the primary victims when it all explodes.

Especially in the crypto market, it is too easy for anyone to register and start trading with small money, this almost-no-barrier thing contributes a lot to the pump.

[swiftbits]

It could be the case, considering how they were controlled by the media, the accumulation of their action can become a trend
but would they last if they can be manipulated? they could lose the game.

[el kaka22]

Newbies are the ones who take the fall in the whale game. If there is no new money coming in then how to do you explain the increasing market capitalization of bitcoin or for that sense altcoins too?

The growing interest in crypto added with the news media's sudden change of stance from "Why you should not invest in bitcoin" to "10 reasons for investing in bitcoin" - does bring in a lot of newbie meat into the market. Those who are unable to buy gold or stocks will try something alternative and the answer quickly ends up in bitcoin.

Point is that the whales need a place to dump their shitload. So the newbies are the ones. If they dont do the FOMO/FUD the cycles will become slowed. Lack of prior trading knowledge or knowledge of speculative markets makes them susceptible to manipulated markets.

This is not a ponzi scheme, you do not need new money to increase the price of bitcoin or any other coin, even the fact that people not willing to sell for cheaper is a good enough reason. So, let's say every single person who is selling right now decides not to and remove their orders then put that into 50k, suddenly the price is a lot higher and we didn't even spend a single dollar, which means price can go up without spending money, it is not always buyers that buy and increase the price, there are sellers that do not sell and hold as well.

If it was always "new money needed to keep increasing the price" then we would be a ponzi scheme and whenever new money didn't come then it would crash and burn, but we had many moments when new people didn't join and we were still doing fine, all within ourselves. So do not be worried if new people do not come constantly, we will be fine.

[TheUltraElite]

If it was always "new money needed to keep increasing the price" then we would be a ponzi scheme and whenever new money didn't come then it would crash and burn, but we had many moments when new people didn't join and we were still doing fine, all within ourselves. So do not be worried if new people do not come constantly, we will be fine.

It is defenitely not a ponzi, what I meant was that new meat in the market is a good thing for the whales to dump on. Whales are out there to cash in and cash out, not for the long term support of the project.

It could be the case, considering how they were controlled by the media, the accumulation of their action can become a trend but would they last if they can be manipulated? they could lose the game.

Without regulation, a market is going to be manipulated once people see that the pump and dump is easy. Besides organic growth in price an inorganic growth is very common here. The effect of the media is evident on the market. These things are to be kept in mind for any trader. Does not mean they have to follow social media, but its effects on the market, yes.

Even newbie trader wannabes know that "the trend is your friend" and it's counterproductive to piss against the wind.

LOL nice analogy there, you would not want to get your pants wet. But you can sell when the price is rising, does that go against the trend? Being with the trend means doing what others are doing, meaning buying when everyone is buying. Am I missing your thought here?

[NeuroticFish]

But you can sell when the price is rising, does that go against the trend? Being with the trend means doing what others are doing, meaning buying when everyone is buying. Am I missing your thought here?

Indeed, the trend means buying when everybody is buying. And when everybody is buying the price is going upwards.
Imho, if one sells when the price is rising, it means that he sells when the others are buying, so imho it's against the trend.

This would denote that the seller is either not really newbie and had a plan to sell after a certain profit, either knows how to read the news and TA and expects a reversal - i.e. again not a newbie.

[Shenzou]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

Maybe this can be applied to small cryptocurrencies but i don't think that it could be applied to the bitcoin market, as bitcoin has became highly dominated by whales and the ones who trade it on a large scale with large amounts, and i don't think those one will do any move or make any decision just randomly that causes a bubble, and even then they would still won't have any large impact on the price since we are talking about a trillion dollar asset like bitcoin.

[inoes]

Amateur traders usually just follow someone's lead (YouTuber, artist, Twitter), follow the trend, and follow what people say on social media without further analysis.  because the bubble is like a local pump, pump as soon as possible and dump as soon as possible.  It is advised not to be tempted by any lure unless it is mastered.  we usually know as DWYOR

[ilovealtcoins]

Bubbles occur from many different causes.
First is the newness of the trend, we saw the dot-com bubble of 1999 with the birth of technology companies in the internet space.
Second, the law does not have an adjustment mechanism for new types of assets and items, leading to market manipulation and disruption. The most obvious examples are the ICO bubble of 2017 and the tulip craze of the past.
The third is the naivety of retail investors in an unknown trend. for example The sharp decline in the price of GAMESTOP stock
Investors seek profits and they are conscious of their behavior but sometimes excessive FOMO causes them to lose. That is the behavior of amateur investors. They are just one of the causes of the bubble.

[Silberman]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

It explains some of the volatility but not all of it, we must remember that the whales have huge influence and they can crash the market if they want in an easy way, we know that a lot of traders use leverage and they overexpose themselves, this means that a strong reduction in the price is enough to wipe them out, so when the time is right whales take the decision to crash the market and when they do this creates a chain reaction which makes the price to go down.

[Similificator]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

Your argument does make sense. New comers tend to just dive in without even knowing what they are getting themselves into. Just with the though of getting rich quick, they believe any exaggerated fantasies fed to them by some unknown source. Which only gives benefits to the developers of those shitcoins and the ones who know what is actually going on. Amd maybe because they got fcked by those shitcoins, they go ahead and invest on well established coins in an attempt to get back what they loss and if possible, get some profit along the way, which isn't really a bad idea. But the thing is, these people have too little to no knowledge about how things work in this industry. Thus, their hand are weak, they get easily swayed by fuds and carried away by their emotions which makes them buy or sell without proper planning or thinking. All this can result in a huge increase in unnecessary volatility.

[famososMuertos]

Well, extrapolate that study to bitcoin is not determining but binding.

In any case, amateurs are the raw material or the main agent that gives value to cryptocurrencies or bitcoin, without these users (all of us) what would be the crypto market, being an investor is within everyone's reach, it is a symbiotic balance, that is not seen in the traditional market, few investors (experts) many actions in a market with controlled access.

[Nunoluck]

That's one of factors that influence bitcoin market volatility. I think amateur traders are mostly lack of skill so they tend to just follow market trend then doubt about their decision, many amateur traders could not distinguished which one is bulltrap or which one is bullish signal. Honestly, I also made many mistake like that but day by day I learn to do trading correctly and of course it is not easy than i think.  So for now I just follow my personal pattern to deal with bitcoin volatility, I only buy when most of people sell and sell when most of people buy, I use this pattern and it works. Most of bitcoin or cryptocurrency users are traders so volatility will be very common thing in cryptocurrency investment. I believe that if Bitcoin spread evenly then bitcoin will be less volatile.

[magneto]

What a load of rubbish.

It's as if they haven't seen the state of the real estate market and how that is the biggest bubble out of anything over the last couple of decades, almost solely driven by institutional investors and developers.

This is a blatant attack on retail investors and their ability to make decisions. The best retail investors are just as capable (if not more so) than biased Wall Street analysts that recommend stocks/funds for their own gain.

[Golftech]

Well, extrapolate that study to bitcoin is not determining but binding.

In any case, amateurs are the raw material or the main agent that gives value to cryptocurrencies or bitcoin, without these users (all of us) what would be the crypto market, being an investor is within everyone's reach, it is a symbiotic balance, that is not seen in the traditional market, few investors (experts) many actions in a market with controlled access.

There are  more amateurs than those who are experienced and wise investors, once those heavy weights

start moving their assets, both sides amateurs are being moved as well, they know how to play from both

emotions and understanding, we can still see this influence from the current situations.

[andriarto]

Well, extrapolate that study to bitcoin is not determining but binding.

In any case, amateurs are the raw material or the main agent that gives value to cryptocurrencies or bitcoin, without these users (all of us) what would be the crypto market, being an investor is within everyone's reach, it is a symbiotic balance, that is not seen in the traditional market, few investors (experts) many actions in a market with controlled access.

There are  more amateurs than those who are experienced and wise investors, once those heavy weights

start moving their assets, both sides amateurs are being moved as well, they know how to play from both

emotions and understanding, we can still see this influence from the current situations.

I see amateur traders as if they are being used by professional traders to launch their strategies. we know like the case of Elon Musk. he spreads the news so that amateur traders can follow, and once they invest in bitcoin, with the power of the media he can influence many amateur traders to buy, when he feels he has had enough, he seems to run away with the money

[Silberman]

Well, extrapolate that study to bitcoin is not determining but binding.

In any case, amateurs are the raw material or the main agent that gives value to cryptocurrencies or bitcoin, without these users (all of us) what would be the crypto market, being an investor is within everyone's reach, it is a symbiotic balance, that is not seen in the traditional market, few investors (experts) many actions in a market with controlled access.

There are  more amateurs than those who are experienced and wise investors, once those heavy weights

start moving their assets, both sides amateurs are being moved as well, they know how to play from both

emotions and understanding, we can still see this influence from the current situations.

I see amateur traders as if they are being used by professional traders to launch their strategies. we know like the case of Elon Musk. he spreads the news so that amateur traders can follow, and once they invest in bitcoin, with the power of the media he can influence many amateur traders to buy, when he feels he has had enough, he seems to run away with the money

While that happened especially in the case of dogecoin I think it is fair to wonder if those people can actually be considered to be traders, after all if you come to this market knowing nothing about trading and relying completely on external influences to take your decisions, are you really a trader? In my mind they do not even qualify for that term, they are just sheep waiting for someone to follow and be slaughtered, but maybe I am being too harsh to them.

[jossiel]

There are  more amateurs than those who are experienced and wise investors, once those heavy weights

start moving their assets, both sides amateurs are being moved as well, they know how to play from both

emotions and understanding, we can still see this influence from the current situations.

The influence is there from those wise investors and big investors and players in the market.

The amateurs are just followers for what they think is good for their own cause. But if they see that the market is not with them, they also don't do anything or take action just as the wise investors does.

They don't do anything if they don't let their emotions control them.

[teosanru]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

I think it was pretty obvious even without any study proving it. But yes I beg to differ with one thing. I think that such amateurs exist in every market. They are not just here into the crypto markets but do exist in stock markets too. It's just that stock market has become so old and matured that it doesn't has that huge fluctuations because of huge sums involved otherwise the number of amateurs are pretty much the same here too. Also regulations cut down volatility by a slight percentage too.

[Princejebs]

Naturally, I think human is programmed to try to outsmart each other. That's why, whenever they see opportunities, they tried to risk it even when they don't fully have the knowledge of what they are actually doing and when everyone do the same, that's how the bubbles began like joke.
Those who where patient enough to hold from the initial begin take their money out as soon as they sees immense gain, then the late comer becomes the bag holder on lost. 

[fullhdpixel]

There are  more amateurs than those who are experienced and wise investors, once those heavy weights

start moving their assets, both sides amateurs are being moved as well, they know how to play from both

emotions and understanding, we can still see this influence from the current situations.

Shouldn't it be better for veteran traders? I mean think about it, if you are a veteran trader and there are a lot of amateurs in the trading market that means you should be doing better than them and while they are losing money, who are they losing to? They should be losing to the veterans. However most likely outcome during periods like this is that there are people on each side losing money and that is the cause of the coin dropping and everyone being unhappy.

I do not think that we should allow something like this to fully blamed on noobs, sure they are making bad decisions but not like veterans are picking up their slack and making a profit while keeping it high, they are taking advantage of it or they are losing with them. This is why I think there was a huge hype, something can't go up forever, and there was a fall eventually which all makes sense and it is totally fine.

[Yatsan]

Amateur traders do have some implications on the market but they are not that strong enough to dominate the whole market to set it into bubble state. But since they are amateurs that have no decent experience and are having a hard time dealing with the market situation, they were the ones to be easily lured to sell and spread FUD which have a big implication into other users having a sudden moderate movement to happen but that will not exactly be the reason for the bubble. Big institutions or big holders are also the ones dominating the market and it is not duly exact what factor causes the bubble for certain reasons are still unidentifiable

[tippytoes]

Amateur traders do have some implications on the market but they are not that strong enough to dominate the whole market to set it into bubble state. But since they are amateurs that have no decent experience and are having a hard time dealing with the market situation, they were the ones to be easily lured to sell and spread FUD which have a big implication into other users having a sudden moderate movement to happen but that will not exactly be the reason for the bubble. Big institutions or big holders are also the ones dominating the market and it is not duly exact what factor causes the bubble for certain reasons are still unidentifiable

I do agree with that. Amateur traders don't have the capability to cause such bubbles. Most of them are just small time traders. For whales in the market, I don't think they can be considered as amateur traders as they have been in this market long enough to know how to potentially influence the market. Amateur ones may influence others by spreading fud owed to what they have experienced. But I don't think they have the capability to make big impact in the market.

[AndySt]

What a load of rubbish.
It's as if they haven't seen the state of the real estate market and how that is the biggest bubble out of anything over the last couple of decades, almost solely driven by institutional investors and developers.
This is a blatant attack on retail investors and their ability to make decisions. The best retail investors are just as capable (if not more so) than biased Wall Street analysts that recommend stocks/funds for their own gain.

You correctly said that it is the best retail investors who have good abilities, but unfortunately we cannot say this about all amateur traders simply because the absolute majority of them lack knowledge and experience and are prone to making impulsive decisions that are not always justified by the logic of the market. However, the same can be said about any sector of the market. Bubbles can form in different areas of the market and lead to the same results, but the reasons why this happened may be different, but you should not put market professionals and amateur traders in one pile because of this.

[TheUltraElite]

Bubbles can form in different areas of the market and lead to the same results, but the reasons why this happened may be different, but you should not put market professionals and amateur traders in one pile because of this.

Well the cause of the bubble might not be completely prove-able. But the propagation of the bubble is mostly done by the bigger whales. The retail investors are not having a money pile that can move the market to increase or decrease the bubble but the whales do.

So one single amateur trader will not cause the bubbles but the hype that is kept on growing by several or hoards of traders will lead to bubbles. Add to that some social media lowlifes who want to make a profit off the bubbles will cause discordance in the growth of the bubble leading to problems for those who are holding for short term.

Overall, it is a part of the bull/bear cycle and bubbles are going to happen. Point is to profit from the rise and not be stubbornly following someone because they "seem to be too active on social media". Retail investors can also take calculated decisions and educated guesses, it is not correct to always blame them for bubbles.

[AicecreaME]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

I really think amateur traders play a big role  in bitcoin volatility aside being its natural state.

Nowadays, bitcoin became more popular. It has higher demands compared to the past few years due to pandemic situation. The majority are finding ways to earn some income as well as alternative form of entertainment or past-time that could help them survive being stuck at home. That being said, a lot of begginers have entered the bitcoin community, which made them take a large portion of the users of btc.

It is a nice thing to have new users, don't get me wrong. However, these newbies usually tend to follow gossips and random information circulating the mainstream media. The begginers are usually worried and bothered so much that they ride the hype and participates to selling despite the losses due to FOMO. With this, the market becomes more volatile than it originally is. And most of the time, the whales are the ones benefiting - they can buy coins at a lower price and they can gain more profits.

[jrrsparkles]

What a load of rubbish.

It's as if they haven't seen the state of the real estate market and how that is the biggest bubble out of anything over the last couple of decades, almost solely driven by institutional investors and developers.

This is a blatant attack on retail investors and their ability to make decisions. The best retail investors are just as capable (if not more so) than biased Wall Street analysts that recommend stocks/funds for their own gain.

Traders and retail investors are highly manipulated but we should stand out from them if we want to be successful and it seems most people in the crypto community is not doing it that is why we are always facing the panic selling whenever the price drops a bit, but we have to get used to it and also it can be an advantage for an individual to buy the assets for cheap prices who are willing to HODL.

[oHnK]

What a load of rubbish.

It's as if they haven't seen the state of the real estate market and how that is the biggest bubble out of anything over the last couple of decades, almost solely driven by institutional investors and developers.

This is a blatant attack on retail investors and their ability to make decisions. The best retail investors are just as capable (if not more so) than biased Wall Street analysts that recommend stocks/funds for their own gain.

Traders and retail investors are highly manipulated but we should stand out from them if we want to be successful and it seems most people in the crypto community is not doing it that is why we are always facing the panic selling whenever the price drops a bit, but we have to get used to it and also it can be an advantage for an individual to buy the assets for cheap prices who are willing to HODL.

When you decided to hold ur asset, u should be aware that hold isn't always safe ur asset but u need to use another strategy. Maybe hold can work if u buy BTC at the lower price since several years ago, but if you buy at the top price, ur asset become shit if u still hold without take average down strategy. For example, I decided to hold without take another way then I got loss so much. My unrealise gain become realise loss, and give me much hit. This is pure my mistake because didn't watch my portofolio as well.

[ChrisPop]

I don't think the "amateur" traders have the financial power to cause bubbles. Bubbles are a joint creation between all the market participants. After all if for example TSLA is trading at 1000x earnings that is the market consensus. Same with Bitcoin - amateur traders are unlikely to have the deep pockets to sustain liquidity at 5-6 figures levels. Sincerely, I haven't only read that the experiment was made on students vs professional traders. Come on.. most students' net worth is negative, not even talking about moving the market or causing any kind of bubbles - maybe the student loan bubble. 

[radjie]

if there are a lot of amateur traders who are compactly influencing the market price then there is a possibility that some amateur traders are able to create a little bubble on the market price and of course it is not worth the huge influence that the whales play

[Hamphser]

What a load of rubbish.

It's as if they haven't seen the state of the real estate market and how that is the biggest bubble out of anything over the last couple of decades, almost solely driven by institutional investors and developers.

This is a blatant attack on retail investors and their ability to make decisions. The best retail investors are just as capable (if not more so) than biased Wall Street analysts that recommend stocks/funds for their own gain.

Traders and retail investors are highly manipulated but we should stand out from them if we want to be successful and it seems most people in the crypto community is not doing it that is why we are always facing the panic selling whenever the price drops a bit, but we have to get used to it and also it can be an advantage for an individual to buy the assets for cheap prices who are willing to HODL.

When you decided to hold ur asset, u should be aware that hold isn't always safe ur asset but u need to use another strategy. Maybe hold can work if u buy BTC at the lower price since several years ago, but if you buy at the top price, ur asset become shit if u still hold without take average down strategy. For example, I decided to hold without take another way then I got loss so much. My unrealise gain become realise loss, and give me much hit. This is pure my mistake because didn't watch my portofolio as well.

There are instances which cant really be avoided due to unpredictability of the market on where no matter how hard we do try on making out those good positions but due to sudden change of market movements which will really be putting us up on hard situation.

I dont really believe about those Amateur trade causes bubbles, in some part this is true but the market doesnt move out only with small portion
which generally involves lots of people who had been dealing and trading with the market so there would be no exception.

[jrrsparkles]

What a load of rubbish.

It's as if they haven't seen the state of the real estate market and how that is the biggest bubble out of anything over the last couple of decades, almost solely driven by institutional investors and developers.

This is a blatant attack on retail investors and their ability to make decisions. The best retail investors are just as capable (if not more so) than biased Wall Street analysts that recommend stocks/funds for their own gain.

Traders and retail investors are highly manipulated but we should stand out from them if we want to be successful and it seems most people in the crypto community is not doing it that is why we are always facing the panic selling whenever the price drops a bit, but we have to get used to it and also it can be an advantage for an individual to buy the assets for cheap prices who are willing to HODL.

When you decided to hold ur asset, u should be aware that hold isn't always safe ur asset but u need to use another strategy. Maybe hold can work if u buy BTC at the lower price since several years ago, but if you buy at the top price, ur asset become shit if u still hold without take average down strategy. For example, I decided to hold without take another way then I got loss so much. My unrealise gain become realise loss, and give me much hit. This is pure my mistake because didn't watch my portofolio as well.

Let me explain about that, in 2017 the price of BTC went upto 20K and lot of people also bought at that price but very sooner the price started to fall and keep falling like what you mentioned as shit but in 2021 the price went to $60K so even people who bought at the last peak price made 3x profits if they hold it until 2021 which is 300% returns for them which is actually not possible in traditional investment such as stocks,gold, etc.

So now decide that whether you are going to hold it or sell it for loss?

[oHnK]

When you decided to hold ur asset, u should be aware that hold isn't always safe ur asset but u need to use another strategy. Maybe hold can work if u buy BTC at the lower price since several years ago, but if you buy at the top price, ur asset become shit if u still hold without take average down strategy. For example, I decided to hold without take another way then I got loss so much. My unrealise gain become realise loss, and give me much hit. This is pure my mistake because didn't watch my portofolio as well.

Let me explain about that, in 2017 the price of BTC went upto 20K and lot of people also bought at that price but very sooner the price started to fall and keep falling like what you mentioned as shit but in 2021 the price went to $60K so even people who bought at the last peak price made 3x profits if they hold it until 2021 which is 300% returns for them which is actually not possible in traditional investment such as stocks,gold, etc.

So now decide that whether you are going to hold it or sell it for loss?

What you say is not entirely wrong because from your perception it is your experience.  If you are like me who saw the phenomenon in my circle of friends who bought BTC without knowledge and bought it at the highest peak of 64k USD for 600USD, currently the asset is only worth 318USD (a loss of approximately 50%).  This means that if he just holds it and lets it go he needs to wait for the price of BTC to go up by 90%.  So, it is much more difficult if he does not buy again at the lower price to reduce the difference in his losses.

[Silberman]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

I think it was pretty obvious even without any study proving it. But yes I beg to differ with one thing. I think that such amateurs exist in every market. They are not just here into the crypto markets but do exist in stock markets too. It's just that stock market has become so old and matured that it doesn't has that huge fluctuations because of huge sums involved otherwise the number of amateurs are pretty much the same here too. Also regulations cut down volatility by a slight percentage too.

The stock market being a centralized market has a bunch of rules that reduce the volatility, its volume is higher and there are so many good stocks that the market does not depend on a single one, this market is the complete opposite of that and while this is great this has the effect of creating way more volatility, however the newbies do not realize the profits they dream about are caused by that volatility and that just as they can earn money with it they can also lose it.

[jaysabi]

 It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

I don't think that can be applied to Bitcoin nowadays as amateur traders don't dominate the Bitcoin market. They have some influence but they definitely don't dominate it. If you were talking about the past, maybe the 2016-2017 market I could agree, but not nowadays.

That said, it must be recognized that they have influence over the price, especially when they are over-leveraged and at the slightest drop in the price they get margin calls, thus lowering the price even more, as we saw recently.

I think quite the opposite. Bitcoin has always been driven by individual investors, it's only very recently that institutional investors starting getting involved.  Whether individual investors still drive most of the trading is debatable, but you'd have to have data to support an argument that what has always been is no longer.

[jaberwock]

If you are like me who saw the phenomenon in my circle of friends who bought BTC without knowledge and bought it at the highest peak of 64k USD for 600USD, currently the asset is only worth 318USD (a loss of approximately 50%).  This means that if he just holds it and lets it go he needs to wait for the price of BTC to go up by 90%.  So, it is much more difficult if he does not buy again at the lower price to reduce the difference in his losses.

Well, there are few things with what you just said that could be changed. For example, if you are someone who bought at 64k, then is it really markets fault that you bought at the absolute peak? That is literally ATH that you bought, that is of course understandable because every high was a new ATH and who would guess that we could move from under 4k in march 2020 to 64k this year, at 20k it was ATH, at 25k it was ATH, at 30k it was ATH.... so and so forth until 64k and everyone so far made a profit so you imagined you would too, but it is smarter to buy when it is going down and not when it is going up, that is an established rule in investment.

Secondly you could always keep buying at these prices to drop, that is not a bad tactic, you know DCA in that case and then you should feel fine. And lastly we are talking about crypto here, it can go up 90%, it can go up 5x as well, that is why we are here, 90% in crypto is not impossible, in fact it is quite tame.

[teosanru]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

I think it was pretty obvious even without any study proving it. But yes I beg to differ with one thing. I think that such amateurs exist in every market. They are not just here into the crypto markets but do exist in stock markets too. It's just that stock market has become so old and matured that it doesn't has that huge fluctuations because of huge sums involved otherwise the number of amateurs are pretty much the same here too. Also regulations cut down volatility by a slight percentage too.

The stock market being a centralized market has a bunch of rules that reduce the volatility, its volume is higher and there are so many good stocks that the market does not depend on a single one, this market is the complete opposite of that and while this is great this has the effect of creating way more volatility, however the newbies do not realize the profits they dream about are caused by that volatility and that just as they can earn money with it they can also lose it.

I think the only difference is the Age of the markets, how can we compare a 200-year-old stock exchange which has stocks of companies more than 100-year-old with a market which has emerged in just last 5-6 years and is still evolving as it hasn't really reached enough number of people. The earlier is obviously much more mature and has seen various seasons and times therefore the reliability of people in those markets is much higher which leads to lesser FUD and FOMO, therefore, lesser volatility, whereas when bitcoin crashes 80% of people feel it's the end of cryptocurrencies.

[ultrloa]

 It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

I don't think that can be applied to Bitcoin nowadays as amateur traders don't dominate the Bitcoin market. They have some influence but they definitely don't dominate it. If you were talking about the past, maybe the 2016-2017 market I could agree, but not nowadays.

That said, it must be recognized that they have influence over the price, especially when they are over-leveraged and at the slightest drop in the price they get margin calls, thus lowering the price even more, as we saw recently.

I think quite the opposite. Bitcoin has always been driven by individual investors, it's only very recently that institutional investors starting getting involved.  Whether individual investors still drive most of the trading is debatable, but you'd have to have data to support an argument that what has always been is no longer.

But it always been pump when the hopes of majority us so high thats why we can see a huge price increase if there are certain hypes spreading on mainstream media. Also we can see so many crybabies after the market crash so we can really say that those guys are contributors and somehow they are one of the reason why bitcoin can be consider as bubble for now.

[wahyu wida]

 It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

I don't think that can be applied to Bitcoin nowadays as amateur traders don't dominate the Bitcoin market. They have some influence but they definitely don't dominate it. If you were talking about the past, maybe the 2016-2017 market I could agree, but not nowadays.

That said, it must be recognized that they have influence over the price, especially when they are over-leveraged and at the slightest drop in the price they get margin calls, thus lowering the price even more, as we saw recently.

I think quite the opposite. Bitcoin has always been driven by individual investors, it's only very recently that institutional investors starting getting involved.  Whether individual investors still drive most of the trading is debatable, but you'd have to have data to support an argument that what has always been is no longer.

But it always been pump when the hopes of majority us so high thats why we can see a huge price increase if there are certain hypes spreading on mainstream media. Also we can see so many crybabies after the market crash so we can really say that those guys are contributors and somehow they are one of the reason why bitcoin can be consider as bubble for now.

yes they are mostly amateur traders who trade using feelings. they will talk more than correct the mistakes that have been made. lulled by the situation when the pump occurred and regretted it during the dump, so only hope and hope that the market will return to the peak. even many of them panicked to sell so that they contributed to the dump

[Karartma1]

Surely a market made of people completely unaware of the instruments in which they invest, especially in the altcoin sector, doesn't help. Much of the market manipulation however is done at higher levels and the stupid who buys high and sell low always get screwed. But this is it, every market works in the same way so if people don't understand the real value of bitcoin, that's their problem.

[Silberman]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

I think it was pretty obvious even without any study proving it. But yes I beg to differ with one thing. I think that such amateurs exist in every market. They are not just here into the crypto markets but do exist in stock markets too. It's just that stock market has become so old and matured that it doesn't has that huge fluctuations because of huge sums involved otherwise the number of amateurs are pretty much the same here too. Also regulations cut down volatility by a slight percentage too.

The stock market being a centralized market has a bunch of rules that reduce the volatility, its volume is higher and there are so many good stocks that the market does not depend on a single one, this market is the complete opposite of that and while this is great this has the effect of creating way more volatility, however the newbies do not realize the profits they dream about are caused by that volatility and that just as they can earn money with it they can also lose it.

I think the only difference is the Age of the markets, how can we compare a 200-year-old stock exchange which has stocks of companies more than 100-year-old with a market which has emerged in just last 5-6 years and is still evolving as it hasn't really reached enough number of people. The earlier is obviously much more mature and has seen various seasons and times therefore the reliability of people in those markets is much higher which leads to lesser FUD and FOMO, therefore, lesser volatility, whereas when bitcoin crashes 80% of people feel it's the end of cryptocurrencies.

Without a doubt the age of the market is one huge factor however another factor are governments themselves, governments do in fact enforce some rules in the traditional markets that lower the volatility, however since they know they cannot really control this market they do not know how to act and it is even likely they try to manipulate it to make it even more volatile, and one example of this is what Elon did, in any other market he will be arrested by market manipulation but since it happened here no one cares.

[ene1980]

The stock market being a centralized market has a bunch of rules that reduce the volatility, its volume is higher and there are so many good stocks that the market does not depend on a single one, this market is the complete opposite of that and while this is great this has the effect of creating way more volatility, however the newbies do not realize the profits they dream about are caused by that volatility and that just as they can earn money with it they can also lose it.

Anyone who is an active trader in the stock market would be scared when they see the volatility in the cryptocurrency market and there is a probability that they will sell off their coins at a loss and basically these panic sell off happens if they are not doing their proper homework before investment and if you are willing to take the risk without the proper homework then you are bound to end up in a loss because the volatility in the cryptocurrency market is nothing new.

[Gyfts]

What a load of rubbish.

It's as if they haven't seen the state of the real estate market and how that is the biggest bubble out of anything over the last couple of decades, almost solely driven by institutional investors and developers.

This is a blatant attack on retail investors and their ability to make decisions. The best retail investors are just as capable (if not more so) than biased Wall Street analysts that recommend stocks/funds for their own gain.

Well I'm convinced there might be another real estate bubble by intuitional investors, like the fine folks behind Blackrock that are buying up homes at 1.2x-1.5x the home's value.

Obvious play here is so they can monopolize a local area and force people into the renters class, but by paying out 1.2x-1.5x on every property, you start to create an artificial housing bubble. With USD inflation, housing prices were already increasing with people dumping out their dollars on physical properties, and it's not the amateur's that were doing this.

[Asuspawer09]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

I would agree with that since there are a lot of newcomers here in the cryptocurrency or like for example here in bitcoin, After crossing the ATH of 20k$ the market just exploded and that is the time when the bitcoin is trading and a lot of newcomers are also investing in bitcoin.

Bitcoin just exploded up to 60K$ which is pretty high from the past ATH of around 20k$, newcomers that don't have enough experience and just new to bitcoin are not used to dumps, because they think that the market will just continue to go bigger and bigger. That is why a lot of newbies lose a lot of money after the Tesla bitcoin announcement newbies easily panic sells dropping the price to around 30k$.

So I think Amateurs are a huge cause of these bubbles but at the same time they were needed to reach new Heights and increase the marketcap as they gain experience, the growth was huge and the next time the market comeback it will be a huge bubble again. We could totally reach even a 1million dollar price in bitcoin but it will be a big bump of the pump and dump that is going to happen before reaching that.

[teosanru]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

I think it was pretty obvious even without any study proving it. But yes I beg to differ with one thing. I think that such amateurs exist in every market. They are not just here into the crypto markets but do exist in stock markets too. It's just that stock market has become so old and matured that it doesn't has that huge fluctuations because of huge sums involved otherwise the number of amateurs are pretty much the same here too. Also regulations cut down volatility by a slight percentage too.

The stock market being a centralized market has a bunch of rules that reduce the volatility, its volume is higher and there are so many good stocks that the market does not depend on a single one, this market is the complete opposite of that and while this is great this has the effect of creating way more volatility, however the newbies do not realize the profits they dream about are caused by that volatility and that just as they can earn money with it they can also lose it.

I think the only difference is the Age of the markets, how can we compare a 200-year-old stock exchange which has stocks of companies more than 100-year-old with a market which has emerged in just last 5-6 years and is still evolving as it hasn't really reached enough number of people. The earlier is obviously much more mature and has seen various seasons and times therefore the reliability of people in those markets is much higher which leads to lesser FUD and FOMO, therefore, lesser volatility, whereas when bitcoin crashes 80% of people feel it's the end of cryptocurrencies.

Without a doubt the age of the market is one huge factor however another factor are governments themselves, governments do in fact enforce some rules in the traditional markets that lower the volatility, however since they know they cannot really control this market they do not know how to act and it is even likely they try to manipulate it to make it even more volatile, and one example of this is what Elon did, in any other market he will be arrested by market manipulation but since it happened here no one cares.

True, applying upper circuit and lower circuit to the stocks which have huge volatility is one major thing which governments do to control volatility but arrest of Elon is too much.  A few days ago a major business journalist in India made a very dubious tweet without any name of any business group but still one business group terribly crashed by around 20-25% when the market opened after that tweet. So these things are pretty normal in every market, there aren't many actions that happen.

[Ultegra134]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

I would agree with that since there are a lot of newcomers here in the cryptocurrency or like for example here in bitcoin, After crossing the ATH of 20k$ the market just exploded and that is the time when the bitcoin is trading and a lot of newcomers are also investing in bitcoin.

Bitcoin just exploded up to 60K$ which is pretty high from the past ATH of around 20k$, newcomers that don't have enough experience and just new to bitcoin are not used to dumps, because they think that the market will just continue to go bigger and bigger. That is why a lot of newbies lose a lot of money after the Tesla bitcoin announcement newbies easily panic sells dropping the price to around 30k$.

So I think Amateurs are a huge cause of these bubbles but at the same time they were needed to reach new Heights and increase the marketcap as they gain experience, the growth was huge and the next time the market comeback it will be a huge bubble again. We could totally reach even a 1million dollar price in bitcoin but it will be a big bump of the pump and dump that is going to happen before reaching that.

We can't forbid newcomers though, they were one of the reasons cryptocurrencies became popular during the pandemic, everyone wanted to buy BTC after it exploded in December, crossing $20.000. This movement might have sparked a larger hype that lead us to crossing new all-time highs. Of course, they are the ones who lose first too, I bet there are people who got involved with Bitcoin when the price was $60.000.

[btc78]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

How can they distinguish a Amateur trader? looking at their account transactions ? what if they have just created new account to hide their personality? remember that in crypto trading anonymity is one of the most concern mate so this can be a not completely truthful study.
though There is also a cause of the bubble when those Manipulator take place things that many denied happening but it is indeed reality.

[meser#]

Amateur traders usually go down to the well with the rope of others. Most of them listen others whisper to buy or sell. So others shitty ideas becomes theirs bubbles. When the shitty bubbles burst they learn painfully what they must to do.

[CoolerSid]

Amateur traders usually go down to the well with the rope of others. Most of them listen others whisper to buy or sell. So others shitty ideas becomes theirs bubbles. When the shitty bubbles burst they learn painfully what they must to do.

Yeap information in that way goes word of mouth

[jaysabi]

The stock market being a centralized market has a bunch of rules that reduce the volatility, its volume is higher and there are so many good stocks that the market does not depend on a single one, this market is the complete opposite of that and while this is great this has the effect of creating way more volatility, however the newbies do not realize the profits they dream about are caused by that volatility and that just as they can earn money with it they can also lose it.

Anyone who is an active trader in the stock market would be scared when they see the volatility in the cryptocurrency market and there is a probability that they will sell off their coins at a loss and basically these panic sell off happens if they are not doing their proper homework before investment and if you are willing to take the risk without the proper homework then you are bound to end up in a loss because the volatility in the cryptocurrency market is nothing new.

If you're a net buyer (of stocks or crypto) then volatility is your friend.  You want the ability to opportunistically add to your position when volatility drags the price down.  This requires you to have a longer term horizon and not care what happens in the short term day to day.  But if you're adding to your position, you want the volatility and the shaking out of weak hands because it benefits you directly.

[jossiel]

Amateur traders usually go down to the well with the rope of others. Most of them listen others whisper to buy or sell. So others shitty ideas becomes theirs bubbles. When the shitty bubbles burst they learn painfully what they must to do.

Because they have no confidence of themselves so that's why they're trying others strategy and thinks that it's going to become more effective to them.

And when the strategy goes wrong because they've listened to others signal of buying and selling, they don't have anyone to blame but only themselves.

[ivankoh]

Amateur traders usually go down to the well with the rope of others. Most of them listen others whisper to buy or sell. So others shitty ideas becomes theirs bubbles. When the shitty bubbles burst they learn painfully what they must to do.

Yeap information in that way goes word of mouth

In my opinion, a lot of young people have joined bitcoin this year. I do not deny it, but it is necessary to humbly view many angles of the market. It is not possible to place blame and blame on them alone. No one has taught them how to better manage their finances in cryptocurrency by failing.
It happened and only that loss and failure to take on longer, more mature when it comes to bitcoin and shitcoins. at the same time, the details of applicable taxes will be their pitfalls when short selling.

[shield132]

 It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

I don't think that can be applied to Bitcoin nowadays as amateur traders don't dominate the Bitcoin market. They have some influence but they definitely don't dominate it. If you were talking about the past, maybe the 2016-2017 market I could agree, but not nowadays.

That said, it must be recognized that they have influence over the price, especially when they are over-leveraged and at the slightest drop in the price they get margin calls, thus lowering the price even more, as we saw recently.

Well,think twice.
Amateur traders still dominate the crypto market.Without them,the crypto whales wouldn't be able to make profits out of market manipulation,by creating FOMO and FUD phases.
Newbie traders have big influence over the stock markets as well,because of apps like Robinhood,trading has become really accessible for the "average Joe".
The volatility of the Bitcoin price can be explained with the nature of Bitcoin-limited supply and unstable demand.Rookie traders have big influence over the BTC price,without them,the volatility would be way lower and the market would be less liquid.

Who dominates the ocean, fish or whales? I guess, whales. Everything is always dominated by the whales, they just use amateur traders to achieve their aims. Whales can create the hype around project and make amateur traders to buy and buy the coin, then whales make some move that makes amateurs to panic and boom, your bubble is exploded.
Amateur traders just follow the flow that whales create, once something goes wrong (i.e. any negative news, massive sell), then people try to move away from this flow as soon as possible. Some people have a little patience compared to others and wait a little further, then they think that price falls so much that it's time for them to leave too, then others follow and once the price reaches the low point (the point when the majority of people sell), then it starts to rise again and then these panicky people are lost in vain and repeat the same.

[TheGreatPython]

Amateur traders usually go down to the well with the rope of others. Most of them listen others whisper to buy or sell. So others shitty ideas becomes theirs bubbles. When the shitty bubbles burst they learn painfully what they must to do.

Bubble, as someone explained quite nicely in another thread, is a price that is not justified, either too high or too low and I tend to agree with that. Amateur traders just trade without actually knowing why they are buying or selling which causes bubbles in the market. Imagine if a market has 150 traders and 100 fools are copying a single fool who is selling his coins, then a bubble is created because the price is down and unjustified then.

I always think that traders without knowledge and lack of understanding are also the reason behind this volatile market since they will not seek value with their investment, they only ride the bear and bull waves. A lot of whales and groups eat alive such traders because they create hype in the market and let these amateur traders buy it, then they will dump it. Almost all the meme coins are surviving and operating on this model.

[Fortify]

A study done by the New York Fed suggests that when trading in an asset becomes dominated by amateur traders, it tends to form asset bubbles.  The study further noted that amateur traders do not aggregate private information well and show lower levels of strategic sophistication than professional traders.  It pretty well explains the volatility that dominates the Bitcoin market without being a study about Bitcoin.

Fed Report:  https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr939.pdf

Bitcoin might very well be the perfect case study for this sort of behavior because it is primarily funded by speculation, compared to something like property for example which could have a very helpful real world usage even if a bubble was to implode. There was a combination of many unqualified investors piling in on the way up and lots of institutional money (Tesla, Paypal, Investment funds) who were aiming to lock in profits throughout. The wise money is able to move so fast that it will always beat the average small scale investor. They will be running algorithms and analysis that can predict upcoming drops in value based on historical information in other markets because they have teams built with specific purposes. That "big money" like always is the real winner here, although smaller scale buyers were beating them in the earlier years.

[wiss19]

In my opinion, a lot of young people have joined bitcoin this year. I do not deny it, but it is necessary to humbly view many angles of the market. It is not possible to place blame and blame on them alone. No one has taught them how to better manage their finances in cryptocurrency by failing.
It happened and only that loss and failure to take on longer, more mature when it comes to bitcoin and shitcoins. at the same time, the details of applicable taxes will be their pitfalls when short selling.

So many traders have recently joined also because of the pandemic since a lot of jobs were taken away and people had nothing but time so that is one reason why the market has so many naive and inexperienced traders right now. There is a misconception among traders that crypto trading has a lot of money and I am not saying that it's true but it hides the fact that to juice out those profits you must have the proper understanding of the trading itself. It is profitable not because it's easy but because it's volatile and has a massive opportunity for growth, unlike the stocks market which is rather saturated.

Being part of many trading and altcoins groups at telegram, I still see people being tricked by scammers by sending them the wrong tokens because there are decentralized exchanges now and anyone can list their tokens. It will take a while for most traders who are new to understand the basics of crypto trading and fundamentals to avoid being scammed or tricked.

[Princejebs]

I think bubbles is good for the market until you are caught on the wrong side of the pump. 
Newbies don't stay glued to the market the way we all do here 247, hence the moment they hear or observe that the crypto maket has captured the attention of the public, that's when most of them remove their money from savings and push them into bitcoin, the moment they all realise that the market is already over bought or the hype began to fade away, they tend to sell back and cahsout out their capital and profit which always lead to heavy fall and huge volatility.

[Ziskinberg]

I think bubbles is good for the market until you are caught on the wrong side of the pump. 

I don't think it is, the fact that it's called a bubble, it doesn't do good for the reputation of the market as it will make most people lose their money when they are eager to invest blindly. People invest because they believe on the project, and they expect the project to grow consistently, not on a pump and dump situation.

[imstillthebest]

How can they distinguish a Amateur trader? looking at their account transactions ? what if they have just created new account to hide their personality? remember that in crypto trading anonymity is one of the most concern mate so this can be a not completely truthful study.
though There is also a cause of the bubble when those Manipulator take place things that many denied happening but it is indeed reality.

i guess they could say it because amateurs and being professional are different words but if we look on the definition of amatuers ,
 it was said that some amateurs can be good too .
 i would not put all the blame on them but manipulation is the real one that cause a bubble  .  manipulation has never been a good thing into this market  .

[FanEagle]

Bubbles are fine, as much as crashes are fine as well. These type of market movements have to happen and it is normal. By the way as far as I know a "bubble" is a major major deal, it should not be used this lightly, like the first I can think of was the tulip bubble as everyone knows, (well mansa musa dropping gold prices a ton in Egypt probably is the first one we know) and that literally destroyed some of the wealthiest people in Netherlands, because they made horrible mistakes, at some point a tulip was worth a house is no joke, it is real but what house? Not a castle for sure, just a small tiny town house for one type of deal probably at best.

Long story short bubbles are major, like 2008 crash was so big that just because american banks lost money, there were tons of nations that bankrupted like Greece and Spain, THATS bubble. Bitcoin is not in a bubble, was not in a bubble and hopefully will not be in a bubble as well.

[DrBeer]

It looks very much like a "study of British scientists" ... Amateur traders can only bring a pool of assets that will become hostages of bubbles that deliberately suit those "who are not customary to talk about on the crypto market." In short, the idea in the title looks like an attempt to find those who are "to blame for everything", except for the real culprits

[FinneysTrueVision]

There are a lot of bubbles in crypto right now thanks to newbie traders. A lot of them are putting money into meme coins and scams. I do not see these bubbles bursting all at once because there are just too many tokens out there. As long as they don't all go down simultaneously then the overall market will be fine but we will have some volatility.

[Xinarae*]

The reason bubbles for amateur traders is that they come to the market without knowing anything about the market. In case of retention of currencies if their value decreases then loss occurs later since it is often difficult to observe the underlying values ​​in real life markets bubbles are often decidedly identified only in the previous region once prices suddenly fluctuate prices can fluctuate unintentionally and it becomes impossible to predict from supply and demand alone. You need to understand the volatility of the market before looking if you have to learn you have to overcome the loss.

[TheUltraElite]

Amateur traders usually go down to the well with the rope of others. Most of them listen others whisper to buy or sell. So others shitty ideas becomes theirs bubbles. When the shitty bubbles burst they learn painfully what they must to do.

Happens with the altcoins - dont you think? I have seen and heard many altcoin shills stay in their bubbles and keep buying more shitcoins only to increase their stock but not having any gains - a continuous cycle of despair.

In that sense, buying bitcoin is better for sanity. You can see the importance bitcoin is gaining from the mainstream world and you can also see the complete lack of importance being given to shitcoins, but which I mean the coins that do not fall in the top-10 list on CMC.

There are a lot of bubbles in crypto right now thanks to newbie traders. A lot of them are putting money into meme coins and scams. I do not see these bubbles bursting all at once because there are just too many tokens out there. As long as they don't all go down simultaneously then the overall market will be fine but we will have some volatility.

I would say, this happens always whenever there is a bitcoin craze. People read news and come in to buy bitcoin but find its price "too high" because they never cared to look into it when the market was bearish and hence they settle with some shitcoin. Mainly the ones being promoted at the same time, which you have correctly mentioned.

[conected]

I think bubbles is good for the market until you are caught on the wrong side of the pump. 

I don't think it is, the fact that it's called a bubble, it doesn't do good for the reputation of the market as it will make most people lose their money when they are eager to invest blindly. People invest because they believe on the project, and they expect the project to grow consistently, not on a pump and dump situation.

- But the crypto market story cannot avoid pump and dump problems, the reputation of the market may receive a bad share but in return, we achieve an expansion, people are eager to access these dangerous bubbles, some blind investors will have their lessons and we as the wise will have money, these will be repeated over and over to weed out and select the winners. You can sympathize with others, but you also need to know that victory is only for a few, there's nothing to believe in, it's all just a conspiracy of whose is better

[Golftech]

There are a lot of bubbles in crypto right now thanks to newbie traders. A lot of them are putting money into meme coins and scams. I do not see these bubbles bursting all at once because there are just too many tokens out there. As long as they don't all go down simultaneously then the overall market will be fine but we will have some volatility.

The crypto market is growing rapidly over the last 12 months. Do amateurs really have enough money to create bubbles? We are seeing more and more institutional investors in the crypto market who invest millions. While I think that amateur traders play a part in a bubble, there are not the main reason. Also amateur traders usually just follow more experienced traders.

They keep following those big players and ended up losing their money, each time whales start moving those

who intends to ride with them are the one who mostly losses their money, unknowingly take part of that market

movement they are unaware with how things will turn out.

[jaysabi]

I think bubbles is good for the market until you are caught on the wrong side of the pump. 
Newbies don't stay glued to the market the way we all do here 247, hence the moment they hear or observe that the crypto maket has captured the attention of the public, that's when most of them remove their money from savings and push them into bitcoin, the moment they all realise that the market is already over bought or the hype began to fade away, they tend to sell back and cahsout out their capital and profit which always lead to heavy fall and huge volatility.

Bubbles definitely aren't good for a market.  A bubble is an unsupportable price for an asset that does not reflect real world utility or value, so when they form it distorts the market and interrupts meaningful information about price from being discerned.  In an efficient market, bubbles don't form, but to the point of this study, amateur traders are not efficient and their lack of knowledge is what drives bubbles and distorts the market, with bad consequences for the overall market through the knock on effects of their distortion.

[Argoo]

You are maybe right in some different cases and markets but not bitcoin. I believe, bitcoin can not be dominated by the amateurs. However, according to what I know more than 90 percent of traders are actually amateur traders, no matter what they think. These newbies are usually holding a little amount of money but even these little amount of money can make the market fall/rise. That's why, In some cases people believe newbies can cause price bubbles in the markets.

The cryptocurrency market will be replenished with newbie traders for a long time to come, because not a very large number of people have cryptocurrency and even fewer even periodically trade in this market. Therefore, the reserve for such a replenishment is very significant, especially if the popularity of the cryptocurrency continues to grow. It cannot be denied that beginners will always have a certain influence on the cryptocurrency market.

[Zilon]

If a market dominated by amateur traders cause bubbles in asset even with the low level of experience and inability to maintain a steady winning trade. Then what would be said of professional traders. From my own view I was thinking professional traders should rather cause asset bubbles since the understand how price flows at every state of the market structure.

[zanezane]

Bubbles popped and never recover, so your claim that amateurs causing the bubble is already not true. Maybe they can cause the prices to go down really at an erratic pace since they have a varying level on how they trade so the movement is affected little by little.

[dmamigo]

The subject is quite true because I still believe I was one of them who used to be a part of the bubble creation when I started trading back 7-8 months ago. But soon I stopped it and increased my time to learn from fellow traders. So, I think there will be more people like me as a newbie or amateur who do such acts while trading to create or help in creating a bubble because obviously, we were not the only factors contributing to the bubble.

[Kyraishi]

And what sort of definition are they giving for a bubble?

I'd actually say that amateur traders a lot of times can support rational price discovery. BTC is a prime example of this. Was there any investment bank that was willing to back BTC at the beginning, if not for a few 'amateur' bagholders who stuck it out? Probably not.

Sure, you could argue that bubbles could form. But given the amount of bubbles that institutions have been a part of (real estate, dotcom bubble, etc.), amateur/retail investors can hardly be given the blame for the consequences.

[awik p]

The subject is quite true because I still believe I was one of them who used to be a part of the bubble creation when I started trading back 7-8 months ago. But soon I stopped it and increased my time to learn from fellow traders. So, I think there will be more people like me as a newbie or amateur who do such acts while trading to create or help in creating a bubble because obviously, we were not the only factors contributing to the bubble.

and I think it is a natural action because our psychology is still in the adaptation stage. actually there is an advantage if a bubble occurs, a large market movement will automatically occur, so we can take advantage of it and find it easy to find the right position to invest. In the selection process, not everyone like you can adapt and evaluate it

[jaberwock]

The cryptocurrency market will be replenished with newbie traders for a long time to come, because not a very large number of people have cryptocurrency and even fewer even periodically trade in this market. Therefore, the reserve for such a replenishment is very significant, especially if the popularity of the cryptocurrency continues to grow. It cannot be denied that beginners will always have a certain influence on the cryptocurrency market.

Eventually that number will stop. For example there are "new" investors in gold every year as well, people who are growing older enough to have money to buy those things, and people who are too old eventually die and they are gone so they are no longer buyers, whereas new kids that became adult replace them. However that is no longer a big number, we do not have too much difference between old buyers dying and new kids becoming adults and buying, the difference between them is tiny.

It means in the gold market we do not have constant new comers that increase the price, of course the price still usually goes up because it is valuable and dollar is worthless so each year dollar gets closer to toilet paper value and gold is still very valuable so the price goes up, but not because of newcomers. Bitcoin will eventually reach that level, we will not have this many newcomers in a year. Not these days, but maybe in a decade or two later.

[jaysabi]

And what sort of definition are they giving for a bubble?

I'd actually say that amateur traders a lot of times can support rational price discovery. BTC is a prime example of this. Was there any investment bank that was willing to back BTC at the beginning, if not for a few 'amateur' bagholders who stuck it out? Probably not.

Sure, you could argue that bubbles could form. But given the amount of bubbles that institutions have been a part of (real estate, dotcom bubble, etc.), amateur/retail investors can hardly be given the blame for the consequences.

BTC price has never been rational because it's not based on anything other than speculation, so that's not a convincing argument that amateur traders support price discovery and actually works directly against the notion.  And institutional involvement in anything is guaranteed once a certain critical mass is reached, that also says nothing about the price being supportable and less than purely speculative.

The definition of bubble is self-evident; unsupported price appreciation that's not tied to fundamental value.  Amateur traders were directly responsible for the dotcom bubble and the real estate bubble because they FOMOed into assets that had no technical basis to be as high as they were.  The crypto bubbles that sprout and pop are just another in a long line of data points supporting the original thesis.

[Rasa nanas]

amateur traders dominate the market? It will not happen.
their number may indeed be large, but the assets they have are not much. I agree with you, asset bubbles occur because they only keep the assets they have for granted. but unfortunately that will not happen because forever the market will be dominated by professional traders with very large assets.

[dothebeats]

Amateur traders cause some hype and disturbance in the market, causing other experienced traders to reel them in even further and create a market scenario which will attract the newbies, causing them to invest more and more in the market. This results to a bubble, which everyone enjoys. We can see this on a few altcoin examples quite often. After the hype has died, the price will normalize, and a lot of the same newbies reeled in by the bubble will just leave the market with empty pockets.

[Expecto]

It's an inevitable scenario to be honest. Because every day, we have many more new investors in this market. And majority of them don't do a comprehensive research about the market and the cryptocurrencies. They start investing into something like this and they're instantly becoming a potential panic-seller. When we see big dumps in the market, they panic and sell their investments right away. And this causes the price of the coin to come down more.