The commercialization of cryptocurrencies for speculative purposes can involve serious risks, especially for new investors. Through the experiences of an English real estate entrepreneur, who lost his life savings during the abrupt crash of the market in December 2017, the importance of managing risks is highlighted
when it is invested in a little-known market.
During 2017, when it experienced an increase of close to 20,000%, bitcoin began to be known to the general public due to the sustained increase in its price in the market. In the second half of 2017 this increase was much more noticeable, and there was the cumulative effect of higher sales volumes, which lead to an increase in price, which stimulates new investors, among them the fearful of losing the great opportunity of easy and fast gains.
Just in the greater slope of that growth, in November 2017, Sean Russell, English entrepreneur who was dedicated to buying properties and reconditioning them, and then selling them, became interested in bitcoin. In an interview with CNN Money, Russell says he had no experience even in the stock market, but that the experiences of acquaintances who had invested recently were all successful.
The decision he still regrets was to have his savings, the equivalent of $ 120,000, and invest in bitcoin. In the short term, the investment seemed right. Rusell says that on certain days he had earnings of $ 10,000 and that this convinced him that he would be able to realize his dreams, pay the mortgage or a fabulous vacation.
On December 17, 2017, at the exchange house chosen by Russell, bitcoin exceeded $ 20,000, and then began an abrupt descent. At the beginning of January, bitcoin recovered and fell again, after confirming that the fall of the pioneer cryptocurrency was sustained, changed bitcoins for Bitcoin Cash (BCH), Ethereum (ETH) and Ripple (XRP), which finally accentuated plus their losses, because sometimes, the so-called altcoins fell more sharply than bitcoin. In total, Russell lost 96% of the investment.
Noting that the total market for cryptocurrencies has lost about $ 600 billion dollars in 2018, by simple statistics it is inferred that there are many cases such as the unfortunate one - and we could add, unforeseen - English investor.
Neither in the moments of rise, nor when the market of cryptocurrencies decays, we find rational explanations of those behaviors. Even, there are facts that do influence the market but that are verified a posteriori. This leads to a conclusion that advises caution to the new investor: it is preferable to assume that the market is unpredictable and volatile, as the first premise.
The other principle that should guide any incursion in the market, is to experiment with quantities that do not represent a setback later, if the hunch fails or if the data of the informed criptoamigo was wrong. If you want to participate in the cryptocurrency market, invest only what you are willing to lose.
¿Did you enjoy reading this article?
@Subaru-kun :)
Congratulations @subaru-kun! You have completed the following achievement on the Steem blockchain and have been rewarded with new badge(s) :
Click on the badge to view your Board of Honor.
If you no longer want to receive notifications, reply to this comment with the word
STOPTo support your work, I also upvoted your post!
Coins mentioned in post: