It was around noon – I was in my favorite bagel store getting my coffee when I overheard someone talking about cryptocurrency. I was quite excited, considering that I finally seem less of a cultist when I mention Bitcoin due to the media frenzy responsible for pulling in new investors. However, my excitement turned into a nervous sweat when the man said “hey, did you hear about this Ripple thing? People are saying it could be the next Bitcoin!”
The market had been a bit unnerving, to say the least – many legacy coins with massive supplies were exploding, and it had the tendency to be a bit confusing. The total market capitalization of cryptocurrency ran a couple hundred billion in just a few weeks, with unknown coins reaching new heights among well-established projects. Something was definitely wrong.
The Top is In.
On January 5th, CNBC contributor Brian Kelly participated in a segment on Fast Money showing consumers how to buy Ripple’s XRP from popular cryptocurrency exchange Poloniex.
U.S. based investors unfamiliar with cryptocurrency outside of the Coinbase quartet were probably shocked at the prospect of a cryptocurrency trading under $100 – let alone $10.
New retail investors saw the price of XRP as an opportunity to capitalize on discovering “the next Bitcoin,” as many like to call their favorite cryptocurrency. However, for XRP to come even close to Bitcoin’s price would require a market capitalization of over one quadrillion dollars.
The price of XRP at the time of the show was $2.57, and although it was being traded at a premium in Korea – it seems as if Fast Money pushed it during its swan song. As retail investors continued pouring money in, Ripple began its slow descent to under $2, until the recent slump drove it under $1.
Ripple wasn’t the only “cheap coin” that followed these recent parabolic uptrends into a spiral – others including parody and rubbish such as ReddCoin, Verge, and even Dentacoin did as well.
The psychology behind the drive was most likely the following: why buy a fraction of a Bitcoin (whether or not the investor knows that’s possible), when you can own a “cheaper” coin in abundance? To someone new to cryptocurrency, what sounds more appealing: 0.54132 Bitcoin, or over 5,000 XRP?
For more details, please visit:
https://www.ccn.com/new-crypto-investor-psychology-where-did-these-high-caps-on-high-supply-coins-come-from/
For traders, psychology plays a very valuable rule and be glad that u r working on that factor ...keep it up....
Thanks
Coins mentioned in post:
Good information