Bitcoin price is volatile

We know that, but what's been happening over the last few weeks ? you may have noticed your retirement portfolio dwindling by the day with some abseil style drops in between. You thought that investing in the top 10 or 20 coins would ensure your route-map to paper millionaire-dom by next Christmas! Your hard earned Steem seems to be evaporating but to where does it condense ?

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Unregulated Markets

Altcoin trading is currently unregulated and so is hotbed of volatility & coin price manipulation. This will probably change in the near future (and the prices will eventually be steadier) but for now with a measly $100bn market cap, it's chump change to the financial world so it's largely being ignored or at least studied from a safe distance. (For example the world's gold reserves are worth about $240 trillion dollars. That's huge and that's just a percentage of the world's wealth contained the shiny stuff.) The entire Altcoin activity is a drop in the ocean. Smart-ass money (serious) people who are otherwise known in the regulated markets as fraudsters are operating freely in the altcoin world so you need to have your wits about you.

Speculators not traders

People buying a wide spectrum of coins in the hope of long term gains can be considered speculators. Traders are continually betting on price rises and falls making profit on as many transactions as possible. Serious traders use algorithms t o execute hundreds of trades per day, just like they do in commodities and futures. You might tell your friends you're trading bitcoins but you're probably speculating and this morning you feel like you're losing.. it's ok. keep reading, it gets worse before it gets better, which it will.

Anyhoo, you've heard of the pump & dump right? This is where a group of traders club together and artificially drive the price of a coin up and up while sneakily accumulating it on the rise before dropping it on eager amateurs who suck up the loss as the price drops just when they've joined the game too late. It's done piecemeal in association with tips in chat, creating excitement & F.U.D (fear uncertainty & doubt) through various channels and relies on a co-ordinated team strategy. It's them against everyone else. if you're a smart cookie you can ride these waves as a side surfer and benefit from the bait ball by grabbing a quick rise, but you have to be quick and it's not for the faint hearted. here's a good explanation from wikipedia

The Tollbox

The wonder tool of the exchanges trollbox chat feed can be used to mess about with people's minds. It's no wonder Poloniex recently got rid of theirs. Not only was the PR becoming very negative from scores frustrated support ticket holders, the admin guys were issuing way too many Red Cards for misdemeanours in a self regulating system where F.U.D is an effective way of manipulating if not entirely controlling the markets.

Here's Todays Winners on the exchange

yeah, that's right you've never heard of any of them ! except Golos which you first heard of last week (Russian version of Steemit) not getting great reviews at the moment.. what's funfair ???

& Here's todays Losers, your old favourites, from about 3 months ago !

screenshots = this morning's prices on bittrex.com @ 10.07.17

So as you can see there's a pattern. All the coins making big immediate gains are coins that are (were) bottom of the league coins with low volumes and the losing coins are mostly coins with an established reputations and higher volumes. This is to be expected. The price of the higher league coins were overheated (a bit like the property market in London) while the outlying territory which was undervalued suddenly becomes more valuable as it was undervalued and therefore easier for ANY investor, big or small, professional or amateur, to imagine a healthy ROI.

If you buy 50,000 coins at $0.001 = ($50) and the price rockets up to 1p = ($500) you can make a really big profit of $450 =(900%). Much bigger than if you buy a 1 coin at $50 each and it double to $100 = ($50) 100% or you put $100 in the bank and get $1.50 annual interest tops !

The Good News

What's happened recently to the price of altcoins is (in the bigger picture) actually a normal adjustment to the market. Did you really think you were going to be a millionaire by Christmas.. Maybe in a few more, you might. If you look back at the graph in a year or so you'll see (what's happening now) as a steep rise, followed by a steep decline but the overall curve will be tending to go upwards.

My bet is that if you have a portfolio of coins in solidly established projects they will not only recover but continue to rise. As coins are increasingly proven to produce real disruptive results, (watch the prices steadily climb over the next couple of years as the world opens up to the future of money e-cash and proudly sitting among them pioneering the economic revolution will absolutely no doubt be your lovely and cherished STEEM. There's a lot of real hard work gone into Steemit and so when people believe in something they support it.

disclaimer

The information in this post is based solely on my observation, analysis & my own personal opinions