So the STEEM train is rolling down the tracks
One can say what you want about cryptos, one thing stays true about any economy.
Markets are driven by greed & fear
As can be seen from the graph above, STEEM has already lost 23.84% of its value today...yes TODAY. This means that if you had $1,000 invested in STEEM, it is now only about $770 worth. Yes, in trading, one can loose quite a bit, quite fast.
Why the steep fall?
The saying goes "What goes up, must come down" and this is more true when dealing with speculation.
Anyone and everyone who has access to a computer will buy cryptos when they are the flavour of the month, giving ZERO thought to the reason for getting involved. The reality is that underlying to any "investment" or "trading" instrument, is something fundamental, something concerned with actual business. The majority of people currently putting their hard earned money into cryptos, know zero or very little about the fundamentals of such coins. For these people, the effect of greed and fear is exponential.
Bitcoin was up 300% this year and Ethereum skyrocketed from approx $20 to $400 in only a couple of months.
NO fundamental has EVER driven an investment or trading instrument to such a degree. Thus, we can make the calculated assumption that greed has driven the markets extensively, and when fear took over, the prices started to tumble.
What to do
So the question arise: "What should I do now?"
Well, believe it or not, but the wrong thing to do is to act upon your own fear that all coins are going to zero and that means the end of blockchain. SIT ON YOUR HANDS.
I know it is difficult, especially if you had quite a bit of money invested. Remember that you had absolutely NO problem when the "greed" emotion drove the markets up. Now fear has kicked in and alot of people have sold off their positions.
Stay calm, get a coffee and read the next paragraph.
The graph below shows the movement for the top 10 cryptos for today.
NO crypto has been spared by the plunge. This simply means that NO specific coin fundamental has driven the fear, but rather a crypto-wide economy effect was the cause.
Underlying to ALL coins, is a blockchain. This is the fundamental that drives each and every crypto currency. If you believe in the amazing revolutionary technological development called "BLOCKCHAIN", then you need to ignore day to day corrections in the market prices of cryptos.
Over time, market prices maintains an average price which correlates with the fundamental development of, in this case, a crypto currency. So along the way you will have spikes and dips in the coin prices, but over time the coin prices will reflect the value of its underlying blockchain and subsequent business case.
graphs from coinmarketcap.com
Exactly right! As long as it still holds true that the underlying ideas and technology are sound and will change the world... the investment remains sound.
I like to remind a lot of people that the BTC they claim to have "lost" money on at $2300 probably COST them $1000.
Of course, if you're a day trader trying to time the market... then you're probably singing the blues.
HODL!
Thank you csmit, and i will resteem
Great post, echos the same sentiment I said earlier
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