Cryptocurrency with the elite representation- Bitcoin (so I'm going to use Bitcoin here) is one of the most devastating storms in Mankind history ever. Cryptocurrency is beginning to infiltrate into the daily life of everyone.
I began this article with a "horror" to this storm, when the “innocent” grocer is my neighborhood rushed to my house to ask me how to recover her account of Bixtrex exchange because she didn’t remember her password. What is mentioning here is that after a few questions about basic knowledge of this market, she just "ignored" and concluded that: “I saw VTV reported that its price is still spiraling, I have profited so I still invest”. That made me think of the time when everyone invested to make easy money from Dot-com storm when the only thing they knew was profit, not super-tech ideas.
Let’s study some notes to get more knowledge and make the right decision before entering the market.:
1.1. Definitions
Actually, there are many definitions for those concepts but according to the majority's opinion, I will interpret according to Wikipedia page’s definitions.
- Bitcoin:
Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency, as the system works without a central bank or single administrator. The system works as a peer-to-peer network, in which transactions take place between users directly, without an intermediary. These transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. Bitcoin was invented by an unknown person or group of people using the name Satoshi Nakamoto and released as open-source software in 2009.
- The Dot-Com bubble:
The dot-com bubble (also known as the dot-com boom, the dot-com crash, the Y2K crash, the Y2K bubble, the tech bubble, the Internet bubble, the dot-com collapse, and the information technology bubble) was a historic economic bubble and period of excessive speculation that occurred roughly from 1997 to 2001, a period of extreme growth in the usage and adaptation of the Internet
1.2. Why does Bitcoin price increase? And what is the FOMO effect?
Perhaps, they are questions which many investors care about most. Just as dot-com stocks at the boom caused the Dow Jones industrial average and the NASDAQ composite to create new milestones throughout the years 1995 to 2000. On March 10th, 2000, the NASDAQ composite index reached an all-time high 5048.62 - twice as high as it was 1 year ago.
The value of Bitcoin is increasing day by day because the traditional cash flow is pouring into, that makes the increasing of the total market capitalization. Specifically, on January 2, 2017, the total market capitalization was only about $ 17.7 billion, on January 2, 2018, the total market capitalization has fluctuated at 642 billion USD. We can easily see the attractiveness of this new wave of investment, which in one year has grown more than 37 times. There are no precedents.
The fact that Dot-Com or Bitcoin is hit hardest because of the FOMO's psychological effect (Fear Of Missing Out), which means fear of being abandoned. People with this FOMO syndrome often have a feeling of fear that they will miss something. Looking back at the past, from the wave of real estate investment, or as mentioned in this article are Stocks and Bitcoins, investors have stumbled up when media outlets chants, argues about the rising price and many have changed their lives from investing. They are afraid of losing the opportunity to "get rich" – it is a kind of once-in-life so that they can sell house or car to invest despite not enough knowledge. With the participation of the mass has made the market is growing more "hot" day by day. When you just purchase them tonight, next morning you have profit. So why not?
1.3. What are IPO and ICO?
IPO (the abbreviation of Initial Public Offering) uses in stocks and ICO (the abbreviation of “Initial Coin Offering”) uses in Cryptocurrency. They have the same purpose that is introducing and promoting a project to the public to get funding for it.
In the dot-com bubble, just adding ".com" to the company’s name has made its stock price skyrocket, even if everyone didn’t really know what the technology of the company was. My friend jokes that: “Nowadays, if your project doesn’t have funds to develop, just tag blockchain to it or proceed ICO, you will get funds immediately”.
Indeed, ICO projects can call up capital so easy that they only need to make a website + white paper (a general introduction to the project) with little marketing can pocket a few million dollars.
However, because of the huge benefits from the IPO as well as the ICO, it has made it become a trend, this makes quality control, as well as the "promise" of the project missions, are unmanageable. In the past, governments have been able to control a little when there are agencies to inspect and screen out the projects with bad stocks. Now, with ICO cryptographic projects, when everything goes completely on the Internet, governments only announce a general ban on ICOs, but can not do full control.
At this point, I can not "assert" that the Cryptocurrency - Bitcoin is a bubble or not, or when it will "explode" because the potential from Bitcoin is too much and grows day by day. I just want to send the most basic knowledge about the market to you, who are getting stuck in this potential market.
Remember that, nothing is ever increasing. And when you invest, the money you are winning means that someone is losing. History has proven that no matter what kind of "bubble" would explode, people would soon forget that to focus on the huge profits it brought.
Winners and losers have always been a pair for so many years, the earth is still spinning and the market is still like that. I do not want to be the loser and certainly you too. Knowledge is infinite, and only true "predestined" people can be together to the horizon of knowledge.
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