Trading cryptocurrencies was never a safe way to make money, as high volatility continues to trouble the space to this very day. However, with the market seeing recovery, many are entering the trading business with no regard to risks.
Of course, trading always demanded both skill and luck. But, it appears that many are opting to rely on luck alone these days, which has led to some interesting if unfortunate results.
Naturally, there are ways to trade and reduce the risk as much as possible, with Bitcoin being the most profitable bet. But, with many emerging altcoins often seeing massive boosts, fortune-seeking traders are finding it hard to resist taking a bet.
Big bets lead to big losses
Back in 2017, the prices were surging, massively. This was the greatest growth that the crypto space has ever seen, and thousands upon thousands of investors came from all over the world, seeking to get rich overnight.
Some of them did it, most of them did not. Those who profited and became millionaires were mostly early investors — those who purchased Bitcoin years before it went big, and had enough patience to wait a bit.
Then, 2018 came, the prices plummeted, and investors and traders sobered up, promising never to take chances again. However, greed has ways to take hold of the best of us, and as soon as the crypto winter ended and the spring had arrived — the old habits kicked in once more.
Bitcoin managed to break the $4,000 barrier less than two months ago, and in that time, it doubled its price, reaching $8,000 earlier this month. While it saw a minor correction and made multiple attempts to breach this level, the traders saw that the crypto winter is truly over. Before long, the mood of the market went extremely bullish again, and less-than-responsible trading returned.
Bitcoin Cash (BCH), in particular, is seeing a massive amount of attention, but Bitcoin itself shows a lot of positive signs, despite the big drop that took place on May 9th. This is believed to be a result of the Binance hack, that saw the loss of 7,000 BTC. However, the drop did not change the mood of the market, as traders feel that there is still a lot of money to be made.
Meanwhile, new altcoins are hitting the market all the time, particularly since IEOs became popular on numerous large exchanges. Traders and investors are in a hurry to see a profit, many of which are, once again, not taking the time to explore the coins.
Binance tokens, for example, performed quite impressively, reaching extreme feats of multiplication in a record amount of time. The exchange recently saw a trading volume beyond 50,000 BTC. Of course, that was before the price crashed, and wiped out 30% off the latecomers’ balance.
The risks of trade
One thing that many tend to forget is that Bitcoin is still susceptible to price manipulation. A good example of this came about a week ago on Bitmex when a major sell order caused an entire wave of liquidations. Those who entered high leverage managed to see quite decent profits. As usual, such behavior is typically a privilege of whales, who hold enough funds to cause such an effect and get away with it.
Smaller investors, however, are limited to taking bets with new tokens sold on major exchanges, or illiquid altcoins of the bottom-dwelling projects. Their prices are pumped and dumped easily, which can lead to some profits, depending on the situation.
Investing in crypto can be profitable, there is no denying that. And, with that in mind, it can be very hard to stay aware of the risks, especially when you see others gain massive amounts in lucky trades.
However, when the ball drops, your position will matter very much, as you can either get away with decent gains, or aim high, and lose everything. The crypto market is behaving like a casino, but it is important that in every casino, it is the house that always wins, and the best you can hope for is moderate gains.
- Source: First Appeared Here
- Published Time: 2019-05-24 16:55:24
The views and opinions expressed in the article Are Coin Holders Rolling the Dice within the Crypto Market Like a Casino? do not reflect that of 48coins, nor of its originally published source. Article does not constitute financial advice. Kindly proceed with caution and always do your own research.
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