RE: Thoughts on trading analysis and signals

[reidlist]

Yeah, I think at the end of the day you just have to hope the appreciation of value in the technology over the long term is going to be such that manipulation ends up being blips on the radar, and eventually I believe it will. The people who really lose out on these types of activity are the people who are trying to make big short term gains. For the long term holders, this type of activity ends up evening out over the long term. It is definitely scary watching your portfolio valuation jump all over the place.

Comments

[marculisse]

Yes, regulation can stop a lot of unqualified financial advisors - just like those pump groups/channels/tweets etc...
But - as I have written in another comment (sorry for copy-and-paste of this 5 lines list..) we are trying to analyze a market featured by:

• No possibility of fundamental analysis (you don't have any form of financial statement)
• No possibility of market analysis (you are thinking to a new product with new tecnology, you cannot evaluate the potential real market for a token)
• Small market cap with a lot of whales that control price
• A lot of weak hands and new traders that are usually trend-follower, increasing price spikes

Prices are ruled, even more than in traditional and regulated markets, by psychologycal factors. so, as you perfectly said, "anyone with a huge following can now make a coin go up or down with their expert analysis". In traditional and regulated market, volatility is controlled also by two other factors:

• Investors can diversify, so there is less volatility because big operators have a more stable market portfolio that allows them to HODL and reduce risks. This is impossible in crypto markets because diversification, in a short - medium term, is unuseful: Bitcoin goes down? China Bans? Great exchanges are banned? All crypto falls, because bitcoin is the real market maker of all the market - so all crypto follow bitcoin
• Crypto markets was born with small capitalizations. Early adopters have mined even hundred of thousands of bitcoin and/or easiliy bought altcoin in ICOs, years ago, when in a lot of cases prices that were 1/1000 of current prices (Ethereum at 2$ and for a long period under 1$ is the best example of easy accumulation). So, there are huge whales.

In traditional market volumes are controlled by with hyper-tecnologic actors like High Frequency Traders https://www.investopedia.com/terms/h/high-frequency-trading.asp that can destroy markets for fractions of seconds but don't create a panic sell/panic buy (too fast, they only kill stop loss users). And in every case regulators - unless, as everytime happens, they are colluded - have the tecnologycal analysis tools and the lawful attributions to interview.

So yes, by this point of view we need of a stron regulation. Think also to all scammed users that now have left the market because there were no law and none kind of legal guarantee..