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Three reasons why most people convert to cryptocurrencies

3 min read

The world of cryptocurrencies is really special. On the one hand, there is a huge number of millionaires in it, on the other hand, it remakes a lot in trading. How is it possible that such a fast-growing industry is destroying most people?

Reason No.1. – Cryptocurrency cycle

The cryptocurrency market is evolving in cycles. The phases of the cryptocycles are in short:

  1. Consolidation – The prices of cryptocurrencies do not move much. Big players are buying cheap, forming a round bottom and building infrastructure. In other words, bull-run preparation.
  2. Reverse trend – The bull market is starting. Cryptocurrencies are uptrend and are slowly beginning to gain value. people are responding to growth with more and more purchases, new traders and investors are also entering the market.
  3. Parabolic growth – The growth of cryptocurrencies will also begin to be noticed by the media. The Internet is flooded with more and more information about how cryptocurrencies are incredibly growing and people are making money. The first crazy and overshot predictions appear. The more the crypto grows, the more the media informs it and the more newcomers it buys – even though most of them don’t even know why. A financial bubble is forming.
  4. Bubble burst & bear market – The price of cryptocurrencies is high enough and big players, kt. during consolidation they bought they start selling. The market is flooded with “new” coins and prices are falling. The bear market begins, during which big players sell

Each phase historically lasted 1-1.5 year.

Cryptocurrencies are a speculative asset controlled by big players. Everything is set up to maximize the profits of a narrow group of crypto-magnates, exchanges, hedge funds and other high-profile players. As a percentage, people with less capital who know how to trade, or understand this cycle, and have enough patience will earn more.

Reason No.2 – Media on which the trader remakes

As we mentioned above, the mainstream media, which behaves like a typical blunt speculator, plays a big role in all this. They inform the most about cryptocurrencies when they record the biggest gains and when prices are down, I keep quiet.

It’s quite understandable. Most of the population is not interested in the fact that BTC has just fallen from $ 3,600 to $ 3,400. People want to read about the new All-Time-High and learn about the latest shitcoin, which will change the world beyond recognition in a year. That’s exactly what’s happening now.

However, this attempt to cause sensations has an unpleasant side effect – people start buying at the most inopportune time and never get a signal to sell. They keep their coins until they bleed enough and eventually sell at a loss. Mainstream media are not interested in educating people about finance and business.

And worst of all, there is none solution this problem. The interest in the crypto is simply greatest when it is no longer advantageous to shop.

Reason No.3. – Too many scams

It’s sad, but in the last few years, a record number of people have been caught by various crypto-fraudsters. The biggest ones include DasCoin, OneCoin or Bitconnect. The problem is that these scams often look better and more realistic than some quality crypto-projects. Even an experienced crypto-expert sometimes has trouble recognizing which is which.

Solution: Don’t put all your savings into one project (typical mistake). Rather, diversify your portfolio and put most of your money in years of proven cryptocurrencies. Of course, profits will be lower, but the risk too!

All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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