It has been a rough week for new cryptocurrency investors and day traders, as many cryptocurrencies have dropped over 50% in value in just a few days time. Currently, Bitcoin (BTC) is trading at just over $10,000 a coin, down over $4,000, in just 48 hours and at one point it dipped below the $10,000 mark, its lowest since late November 2017.
These large fluctuations in price are not anything new in the cryptocurrency space, this would be the sixth time in a year that Bitcoin has dropped over 30%. However, new cryptocurrency investors that have just recently entered the market are to partially blame for this price slaughtering.
These past two months, these newcomers to the cryptocurrency world have not seen many of their crypto wallets in the red, except for the slight correction before Christmas. Many of these investors enter the market on news that they heard of people making thousands of dollars and expect the same, without doing any sort market research and buy based on the “hype.”
With new regulations being dripped out in the media by China and South Korea, two major countries that have a large percentage of cryptocurrency investors many have begun to panic. Prices have also dipped, due to the Chinese New Year rolling around and a slight correction like this has occurred in the cryptocurrency market the past four years, like clockwork. Newbie investors have begun to panic sell in order to try to save themselves, which has driven down the market even further.
Most avid crypto investors are in the long hold strategy because they believe in the technology behind the coin, know the potential it has in the future and have studied the unregulated highly volatile market. My advice, study as many white papers as you can on various coins and what these projects have in store for the future, choose a few and just hold it. Do not check your wallet’s gains or losses every week and chill. Those in it just to find the next big altcoin and day trade, I’d be naive to say that there isn’t some sort money that can be made but one must anticipate some loss. From an “investment” standpoint and life lesson, delayed gratification almost always yields the highest rewards.
Despite the mayhem that currently is the cryptocurrency market, Initial Coin Offerings (ICOs) are still booming and receiving tons of interest and money.
Dan Novaes, CEO and co-founder of the ICO Current, told CNBC that despite the current downturn of Bitcoin in the last two days that his company had received “thousands upon thousands” of individuals wanting to participate in their token sale. It just goes to show that there is a large number of investors within the space that believe in these projects and see blockchain’s long-term potential. As per ICO bench, there are 512 ongoing ICOs and 247 upcoming. Last year alone, the ICO market raised $3.5 billion and a large portion of that was in the month of December. Despite the market’s current state, the ICO portion of the space hasn’t seemed to be affected.
Featured Image: NPR