- is it a bubble?
3.1. sell cryptocurrency – when is the right time to sell cryptocurrency?
3.2. is HODL very risky or smart on crypto?
3.3. sell on highest point, how to know?
The crypto-mania hype fever is rising at an unprecedented scale. Millions of people are already engaged in the technological upheaval of mining and farming of cryptocurrencies. It’s the new Gold Rush minus the Wild West mayhem. The capitalization of cryptocurrencies has already punched through the $200 billion mark and is still rising. Many are already questioning the solidity of the “financial” asset and the dubious lack of its backing. Though much like the USD, which itself has no asset backing unlike other classical currencies, Bitcoin holds the alpha male lion’s share of the crypto market cap. The question lingers still, like a moldering corpse in a tomb waiting to resurrect for the zombie apocalypse – is it all a bubble waiting to burst at any moment?
Deputy Prime Minister Mehmet Şimşek warned investors on Dec. 13 against betting on cryptocurrencies such as Bitcoin, comparing the current Bitcoin frenzy to “tulip mania” of the 17th century. “Bitcoin surpasses tulip mania, which was the biggest asset bubble in the history of finance at the time,” Şimşek said on Twitter, referring to the 17th-century Dutch craze for tulips from the Ottoman Empire. While the price of Bitcoins can suddenly rise sharply, “it can also collapse later,” he warned. Tulip mania took hold of the Netherlands in the 1630s, when prices of the flower bulbs rose o unheard of levels before collapsing in a manner that led to a slew of suicides. Şimşek’s warnings come in the wake of Bitcoin’s 1,600 percent rise in value this year. In another move still strengthening doubts was South Korea’s decision to ban its financial institutions from dealing in virtual currencies on Dec. 13, as Bitcoin soared in a bubble fueled by retail speculators, many of them from the country.
There is no simple answer to whether it will all burst at some point, but the more pressing question for most investors is when to sell cryptocurrencies so as not to end up standing on a window ledge when the arrow on the screen starts punching through the red one day. Just as it has proven to be difficult to catch a whiff of rising crypto prices, so too has it proven difficult to detect their sharp drop as experience shows that the only true aggregator of information has proven to be the media with its unprecedented ability to influence prices.
There are some who refer to HODL. However, it is a moniker, which has made its way into the crypto world in a silly manner. “Hodl” is simply a misspelling of “Hold” which expresses the zeitgeist of crypto investors at the moment. The term originated on the Bitcointalk forum in the thread titled “I AM HODLING“, in which a user named “GameKyuubi” who made the spelling mistake when expressing his thoughts about his mindset when it came to Bitcoin trading. To avoid such misconceptions, most traders refer to more civilized methods of doing business. The answer in this regard is either installing bots to sell high or they simply avoid cryptos altogether.
Though the crypto market is still relatively new and lacks many of the traditional institutions of a civilized market, there are projects on the market that seek to indemnify or mitigate the associated risks that investors take when deciding to invest in projects. Cryptics is one such project that seeks to offer the necessary instruments for alleviating the situation with uncertainty. The concept behind it is to support market participants by providing liquidity on exchanges and a safety cushion for retail investors by creating a platform that connects market players and develops algorithms to predict changes in the value of cryptocurrencies. Such instruments based on highly advanced scoring models involving machine learning and AI are incomparable with human intuition that even the luckiest and most prudent investors could ever be endowed with. The multitude of factors involved in predicting a cryptocurrency’s rise or fall are all taken into account by the algorithms that Cryptics employs. Investors should consult such projects as the expense is well worth the ensured profit and peace of mind.