The technology might be new but the pattern is the same. If you learn to analyze the pattern of markets, you can predict the outcomes as well. During the mid-90’s e-commerce and websites businesses were valued at approximately $80 billion USD with just about 20 million users. Anybody could set up a business online and get rich overnight. Companies (and many scammers alike) issued tons of IPOs (Initial Public Offerings) to quickly raise money from investors, who were buying without their own research into the company. Eventually the stock of many companies plummeted and the results were catastrophic. The bears won and the bulls suffered. The crash however paved the way for tech giants such as Facebook, Google and Amazon.
The thing with stock trading is, if you don’t buy, you cannot sell when the price surges skywards. However, when the price does increase, you still do not make any money, unless you sell. Investors are faced with a dilemma of holding or selling. It often happens that investors choose to hold where they should be selling. At that point in time, they do not know the direction of the market. It is only in retrospect can they view their decisions and see where they went wrong. Stocks can be very tricky and if you don’t know what you are doing, it is better to keep a safe distance or hire a stock broker to trade on your behalf.
Another good example is of Uber – the ride hailing taxi service. When Uber started way back in 2009, the drivers were making unprecedented amounts of money. It was rumored that Uber drivers were living luxury lifestyles. However, as more people got attracted to driving for Uber, the income of each individual went down by a long shot. Some videos on youtube conduct a thorough analysis on how Uber actually makes you feel like you are making money, but is actually not profitable.
Through years and years of recorded data, we can see that the early adopters of any idea are the ones that benefit the most. People, who purchased Bitcoins when they were at an all time low, are potentially millionaires today. Same goes with Ether on the Ethereum platform. Bitcoin and Ether started from $969 and $8 in January 2017 and soared upwards to $5000 and $400 respectively by September end.
According to venture capitalist and crypto investor David Seimer, there are more than 1,000 digital currencies in the market right now, with 105 Initial coin offerings (ICOs) in the last quarter alone. ICOs are mainly used to raise funds from investors. Tokens are like stocks and securities of the company which eventually might have some value for investors.
The Securities and Exchange Commission (SEC) is likely to step in with more regulations regarding crypto currencies in order to regulate the ICOs. This is likely to put “a big dent in things” according to Seimer. Ultimately, this would filter the real value applications and protect it from scammers and bring prosperity to the entire sector.
Whether you buy, hold or sell, the fact is clear that mainstream Cryptocurrencies are here to stay but the rest are still extremely volatile.