The Crypto is one of the most interesting and developing technological areas. And today it is almost entirely based on speculation.
Distributed registry - block technology is a world-changing innovation with a wide range of real-world applications. But now in most cases, its use is just market speculation. There are a number of different business enterprises that use a lot of cryptographic tokens for fairly rare sales of any novelties, but there are also a lot of companies created to use the advantages of digital currencies. They, of course, are in the minority of a relatively long list of exchangers and speculators who are eager to make a money injection to get a quick profit in the crypto lottery.
The Madness in Crypto Markets
How long have you been testing the markets for crypto currency? This is chaos. Long-known "safe" coins suddenly received serious blows, little-known coins, as if out of nowhere, fell into the top 10 in one night, almost abandoned projects suddenly found their place under the sun. Now is an exciting time - to be a speculative trader, that's for sure. For those who are trying to learn the basics of this significant technology of the future, it will be difficult to systematize important knowledge for serious, long-term and influential projects.
Illogical trade confuses investors and developers
Innovations are promoted through investments and talk about money. The inflow of capital sends a market signal to the developers of the project: "You are doing everything right, keep it up." Other investors notice the direction of cash flow and support successful projects. The obstacle arises when speculators start to throw in money in any coin pointed to by their Sacred Speculative Wheel after another quick promotion. Investors, seeing that the money flowed into the project, believe that there will happen something good and follow this example. Developers who may have already abandoned the project legally consider the renewed cash flow to be an indicator that this project can be raised again. When these market signals are random and speculative, savvy investors and savvy developers can guess and circumvent such a deception. However, they are few and they are separated in time, so groups of little-informed market participants follow crypto-roulette wherever it points.
Volatility reduces stability, so necessary for business
While all these sweeping fluctuations in the world of crypto trading can look ridiculous and delicious, they in no way contribute to the sustainability of all commerce. Business has certain risks, it's the cost of a startup, hard work, etc., for a carefully calculated profitability equation. After all, even an increase in the price of 5 cents at a local coffee shop affects a number of factors of solvency. When using crypto currency in the business model, all these big price jumps, long confirmation time and transaction costs can be deadly. While traders play with amusing money, they also play the hopes and dreams of those who have invested the accumulation of all life in this cycle of entrepreneurship.
After all, pure speculation is an important stage
Of course, we can complain, but all this is just another step, which the developing industry should overcome. The mania of speculation is only a growing interest and excitement, and some of these random capital injections will necessarily revitalize serious projects, as a result new users will be attracted, developers will be hired and investors will appear who have not shown any interest in the project before. It is equally important that the explosion of an unstable bubble will punish bad investors and identify viable projects worthy of attention, reorienting the market towards more reliable enterprises. The end result will be the emergence of experienced and well-trained investors in conjunction with mature technologies that have withstood a storm of ups and downs along with fierce competition. This will mark the final victory of crypto technology.