truth is that it is a *{EVERYTHING IS A BUBBLE} and more dauntingly isn't really much of a new one as far as the trend of these kinds of markets go , And after studying the “Dot com “bubble the similarities a scary , and to simplify it for the people who don’t know of it, It happened during the late 90’s, in that period any company and stock with dot com in its name was heavily traded and touched sky high prices with the intrinsic value not even mattering in, and then as bubbles do it burst.The Crash taking down millions of people, with losses in billions of dollars.
It was the overvaluation that was the main reason of the burst and the resulting downfall, but it doesn't mean it wasn’t beneficial, and it in fact birthed and helped the most profitable and innovative companies in the world currently like Apple,Google, Microsoft, etc. ; Similarly with the Crypto Boom .It would be foolish to say all crypto is bad, i.e. like saying Bitcoin isn't going to change the banking system forever and already having a heavy impact ,and bringing the blockchain and decentralization to the mainstream and Ethereum’s power to change the way you bank , and the concepts of a programmable blockchain is very heavy. It's all about understanding the intrinsic value of the system and then valuing it not on tailwind news and excessive speculations like what is currently happening right now combined with how easy it has become to invest for people who just want to gamble without understanding what they are actually doing, These kind of people range from teenagers with money to spare to one time millionaires with gambling problems and both of them lack of knowledge and sense of basic financial understanding .
Practicality, it is a very important skill , and combined with rationality it becomes a key in money making and investing and these skills are currently lost in major Crypto investors , as it just turns into a casino gamble by looking it up on Twitter to double-check your speculation and then they invest deep money into it and liquidate it when there is a correction , leading to increased volatility, it is basically a accessory to the already crazy amount of speculation and it creates huge losses for the market and the volatility , Thus creating cults for specific tokens, for example look at the investing on dogecoin which is, by the laws of basic economics,that due to basic supply and demand shouldn’t work but still does . These kinds of tokens are called shit coins and are Pump & Dump schemes.Not all Altcoins are bad as many of them are companies that are getting off the ground and need funding like XRP, ADA which are excellent concepts. But after I did a brief analysis a good majority of coin market is occupied by shitcoins, shows there are more pump and dump schemes than there are actual companies that work. This is going to end in a disaster for many investors, ruining the possibility of a decentralized future. The main reason people don't get the magic of Crypto is because it's lost in the maths and computer science. BTC is high because of supply and demand economics, and its storage value. Ethereum is going up cause the thought of a programmable blockchain is very practical.These are the first and second generation crypto-currencies.Bitcoin is basically Digital Gold while, Ethereum being titanium and the third-generation currencies be platinum.
In my next Article , I will be talking about why gold is a bad investment but is the best asset.
Footnotes :
* NFT stands for non-fungible token now you might have an idea what it is. ... NFT allows you to buy and sell ownership of unique digital items. NFTs are basically blockchain tokens representing a unique digital item. NFT can represent almost anything like art, graphics, music, videos, images, etc. Artists who want to sell their work as NFTs have to sign up with a marketplace, then “mint” digital tokens by uploading and validating their information on a blockchain.
Yorumlar