People are getting burnt from dabbling blindly in cryptocurrency from the fear of missing out.
Bitcoin and Ethereum both saw a slight dip. Panic all round. Chat groups are buzzing with "imminent market collapse" and "bubble bursting". Is this true?
No and no. Firstly this is a regular Sunday occurrence and has been for weeks now. Sunday it falls, Monday, Tuesday it goes back up.
Also I believe the result of the vote to fork Bitcoin with SegWit2x that was released on the 21st of June had something to do with it. BIP148 is coming up next on 1st August. So we probably see another shift then as well. Price fluctuation is expected. Will Bitcoin die? No. There are way too many countries and powerful people involved now with money invested in it for it to die.
That being said, this cryptocurrency fad certainly has all the attributes of a bubble build up. Now, more so than ever, it’s very important for you to do your research before investing and, I cannot emphasize this enough – do not believe all the hype about flipping huge returns over night. It can be done, but not by inexperienced traders, and especially not by blind investors betting on luck.
Which segues nicely into the next topic.
There are two kinds of pump groups - private and public. If you're not in the former, than you're the idiot that's gonna be losing money. How it works is very simple: Private pump groups made up of people with money buy into a coin when it's low, and then they leak news of it on public forums of an impending pump at a certain time. Everyone else who is deluded with the idea of easy money rushes to throw in their money.
Rich guys dump their coins. Makes the money. Price drops. Everyone else grabs on to their balls in horror as prices plummets down 400%. There's no recovery from that. Not that soon anyway.
Another example of a coin that has disappointed many people is Bancor. A report released a week ago by Cornell Professor Emin Gün Sirer put Bancor in a bad light, stating - in not very polite terms - that it’s basically flawed. Bancor managed to raise 150 million dollars in two and the half hours during the Initial Coin Offering (ICO) but nosedived shortly after getting on the exchange. Bancor released a statement to refute the article but that just got people even more pissed off. Fact is, people lost money.
And this could be you.
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