The Ups and Downs of Cryptocurrency: Why You Should Ride Out the Storms
Published on: 07 Aug 17:59
When automobiles were first invented, people said they’d never replace the horse and buggy. When car phones came out, people dismissed them as a luxury item that people would just not buy into. After all, who needs a phone on the go? And when peanut butter first merged with chocolate, there were naysayers as well.
Cryptocurrency is a digital currency that is making waves because of its potential. It’s a decentralized medium of exchange accessible by every person in the world and that is verified through blockchain technology that anyone can view. It has the potential to replace our traditional banking system and currency as we know it. And because of this, people are resisting. Simply put, cryptocurrency is a threat to existing ways of doing things, and humans by and large operate off habit and resist change like they resist going to the dentist. However, like the horse and buggy, change can revolutionize our lives and make our lives easier.
cDuel is a free cryptocurrency game that allows users to trade cryptocurrencies using real time values. It’s a great way to learn all about cryptocurrency and the market as a whole in a risk-free environment. You’ll gain hands-on learning while having fun. In this blog post, we’ll go over why cryptocurrency is currently down and why you should ride out the ups and downs of this potentially life-changing financial medium. Visit cDuel, and sign up for your free trading simulator game today!
WHY CRYPTOCURRENCY IS DOWN
- Growing pains. Cryptocurrency has been around now for just over 10 years. Many people who initially got into the cryptocurrency market have now gotten out because they are not seeing the returns they expected to see by now. However, like cars, cell phones, computers, and planes, it often takes decades for a new idea to catch on. Furthermore, it often takes decades for the technology to catch up to allow the idea to come to full fruition. Leonardo di Vinci envisioned a flying machine in the 1500s. It was a 400 year wait for his idea to take off (pun intended). While this example is extreme, the point is clear — you must be patient when new ideas and technology come out. The human mind is fickle and can turn on a dime. cDuel, the maker of the best trading simulator, notes that the waiting game is now in full force with cryptocurrency.
- Confusing. There’s no doubt one of the major reasons cryptocurrency is growing at what seems like a snail’s pace is because of the learning curve. In today’s world dominated by immediacy and who’s doing what at any given moment, people won’t put the time in to learn about cryptocurrency until they are forced to.
- Making profits. It often pays to be the first one in a market. Amazon was the first online retailer to first offer books and now it offers everything. Starbucks was the first to capitalize on novelty coffee. Apple was one of the first to make a computer. Thus, those who entered the cryptocurrency market early could make money through day trading, mining cryptocurrencies, or offering ICOs (Initial Coin Offerings). However, these days, it’s not so easy to do any of these. The SEC (Securities and Exchange Commission) is now monitoring ICOs for fraud, which hurts the legitimate ICOs. Day trading is difficult in a bear market. And mining is not as profitable as it used to be with more competition. Again, patience will be the key, cDuel cautions.
- SEC. The whole point of cryptocurrency was to be unregulated by governments and exist outside of the control of others. That idea is great; however, because of this uncertainty, investors are hesitant. Overall, if the SEC does end up legalizing cryptocurrency ETFs (Exchange Traded Funds), which are like mutual funds with cryptocurrency as part of their portfolio, cryptocurrency investment could see an explosion as now the risk is much lower.
- Perceptions of cryptocurrency. Partly due to the fact cryptocurrency has been around for so short of a time, many investors see it as a way to get in, make some money, and get out. Very few are in cryptocurrency for the long haul. Without investors who hold, the market becomes very volatile.
- Pump and dump. Because so many investors do want in and out quickly but still want to make a profit, there is a lot of manipulation of the cryptocurrency market. cDuel, the best online cryptocurrency trading simulator game, notes that pump and dump is widespread, meaning that a cryptocurrency’s value is artificially inflated and then sold off to make a profit. This is easy to do in such a small market as many cryptocurrencies have.
- Red flags. Bitcoin had an unprecedented rise to being worth $20,000 in 2017. Tether, a stablecoin, is being investigated as having been used to prop Bitcoin up during this gain. Either way, cDuel, a cryptocurrency game, notes that both the rapid rise and the manipulation of stablecoins are shaking investor confidence levels.
- Risky. There’s no way to put this lightly, so blunt works best here. cDuel, the best cryptocurrency game, notes that investing in cryptocurrency is risky. There is no true way to diversify this risk since Bitcoin is about half of the total amount of cryptocurrency on the market. This means that so goes Bitcoin, so goes the market — and there’s nothing you can do about it.
- Illiquid. As with anything new, be it a new phone or a new type of car, it takes a while to gain volume. With cryptocurrency, lack of volume translates into lack of liquidity or the ability to buy and sell cryptocurrency and quickly. Liquidity typically brings stability, cheaper transactions, and more investor confidence to a marketplace. Until cryptocurrency becomes more popular, cDuel, an cryptocurrency trading game, cautions that it will probably stay thus so.
- Security. Although this is a problem for every currency on every exchange, it’s worth mentioning here because it is particularly impactful to cryptocurrency. Cryptocurrency seems to get press every time there is a security breach. In 2017, cryptocurrency hacks rose a whopping 369 percent. It’s a problem that should be addressed by every cryptocurrency exchange.
- The Bitcoin split. For those who don’t know, Bitcoin split into two separate cryptocurrencies in 2018: Bitcoin Cash SV and Bitcoin Cash ABC. Like all splits, it was due to irreconcilable differences amongst the developer and the miners. After this split, cryptocurrency prices plummeted, and it has not recovered since.
WHY YOU NEED TO WEATHER THE CRYPTOCURRENCY STORM
Those who were in first are often the winners, even if you didn’t come up with the idea. Those who believed in Starbucks, Amazon, Google, Wal-Mart, and so many more, entered the market, bought stock, and held onto it are reaping the benefits. The same is true for cryptocurrency.
The reasons stated above that cryptocurrency is down is a boon to you. You have the opportunity to invest in a relatively new market and idea, and get in before the others. Cryptocurrency is still largely unregulated, so there are no hoops to jump through to invest. However, the time to invest is now. The more people believe in cryptocurrency and its market, the more investors you’ll have come on board, and the more you’ll see the price increase. Buy low; sell high, and remember it’s the early bird gets the worm.
cDuel, a cryptocurrency trading simulator game, believes passionately in cryptocurrency. That’s why we’ve invented our trading game to help you learn all you need to know before investing. It’s free to you, and it’s fun. Simply sign up for an account, and begin. The game uses real time values of cryptocurrencies as you try to maximize your return on investments. This trading simulator gives you a real life trading experience in a safe environment. Sign up today!