Investment, cryptocurrency, volatility... Very pend before investing

almost 4 years ago

Considering whether or not to invest in a business is always a decision that should involve careful study before doing so. One thing that strikes me is that when something seems to be very profitable for some people,there are those who want to go in and invest, only attracted by the possibility of winning, but you can lose sight of the fact that in every investment there is also the possibility of losing.

When we talk about investing in crypto currencies, these options (win or lose) are very present. *I'm not a specialist in investments or anything like that, but common sense and logic lead me to consider some things, which I want to raise in this publication.

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There is a term that is very important to know, it is applicable in any area of commerce and finance, but in the field of criptom currencies it is much more notorious, that is volatility, we can simply define it as follows:

"The instability of prices in the financial markets.”_Source

As you can see, it speaks of price instability, and as we can see, cryptoactive prices are a permanent up and down. This is something that many don't consider.

To make it easier to understand, I give the following examples:

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About 3 months ago, the Bitcoin was a little bit over 3000 dollars, now it's over 9000 dollars, that means, who three months ago bought 10 BTCs invested about 30,000 dollars, and just keeping them, now he has over 90,000, OOOH, GREAT, right?, this is one of the possibilities when we enter the world of cryptocurrencies, to make a lot of money in a short time, of course, it's always going to depend on what we can invest. This Volatility is taken advantage of by people who specialize in that area, the so called Traders, and they buy at a low price and wait for it to go up, so they can sell and make a profit. Obviously it is to think that the higher the investment, the higher the profit can be too.

Up to here we can say that everything is going well, we are millionaires with this investment, but, it usually happens, that when apparently it is only profit, there are those who risk a lot to get in and try to take their good part of the profits, there are even those who dare to mortgage house and cars to invest, and they go with their eyes closed, and lose a lot of money, and more than that, even the possibility of sending their children to a university or they lose the roof that they worked so hard to get.

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Let's do a little memory exercise, at the end of 2017 the price of Bitcoin reached its peak, on average 18000 dollars per unit, a lot of commotion was made from that price, and not only BTC but other crypts also went up.

In view of that, some said I will invest everything I have, and buy crypt coins, without making a minimal study of what could happen, and in January 2018 everything changed, the prices of most crypt coins went to the floor, and have remained well below those values that reached, nor have they come close, then, those who invested at the end of December 2017, if they sold what they acquired at the maximum price, no doubt it did not go as well as they expected. They experienced what is a large scale price collapse, and the product of the volatility was not profits, as they expected.

A basic rule I learned a long time ago:

Don't risk money you can't afford to lose.

I'm publishing this in connection with the Halving of the Bitcoin that's about to be executed. Surely many will want to invest, expecting a sudden rise in price, and it could happen, of course, but also the opposite.