After another adverse event, such as the breaking of the crypto currency exchange Bithumb and the intervention of the Japanese regulator in the affairs of exchangers based in the country, the frustrated user of the blog r / bitcoin (section Reddit) asked why the crypto industry reacts so quickly to negative news - the rate bitcoin for a short time fell below $ 6000 - and so slowly perceives industry-friendly messages?
There were more than 70 comments under the post, and we decided to collect the main points of view of users and understand the reasons for the reaction of the crypto community to the negative.
Fear of loss is stronger than the desire to earn more
"People come to this industry for money, they need money and nothing more," one of the users who commented on the post is sure. Therefore, the investments invested in such a volatile but profitable crypto-industry are of great value, which it is a pity to lose.
Financial behavioral researcher Martin Pring, relying on the basic prerequisites of technical analysis, argues that in the market "all decisions take two emotions: fear and hope." Fear of loss and belief in increasing assets affect all actions.
For example, at the last sharp drop of bitcoin in early June, sales of assets sharply increased by 11%, because traders were frightened of the possibility of losing their coins. At the thought of missed opportunities for earning on a falling coin, especially inexperienced Kryptornka players begin to casually invest in altcoyins.
Another financial analyst who studies trading behavior, Hersh Shefrin, believes that in addition to fear people show hope, because they too believe in themselves and their calculations. "When traders are frightened, they focus on the unfavorable aspects of trading.
Faith is the polar opposite of fear. If this feeling arises, they focus on the favorable aspects of the trade and think: "I wonder how much I could make on this transaction?". They are counting on making a profit, instead of constantly worrying about the amount of money spent, "Shefrin says.
Too many conversations
"The block-industry is too advanced. Almost everyone wants to become an expert and express their opinion. And those who do not want to appear clever listen to the advice of numerous experts who themselves often do not know what to do and how to act, "one of the users of r / bitcoin expresses his opinion under the post about the reaction of cryptology to bad news.
Thanks to programmers and other professionals, the block-branch is not only one of the most progressive, but also open to communication. In order to hear the opinion of one or another specialist, it is enough to go to his social network account and read the posts, in which, as a rule, all important events of the crypto sphere are evaluated. From a professional point of view, this kind of communication refers to "fact journalism" and is the fastest way to receive news.
More operative and expressive is the information in Twitter, which is not surprising, because there the subject of crypto currency is inferior in popularity only to the statements of the US President Donald Trump. Tweeting is updated regularly, during the day there are brief reflections on the past, present and future situation of bitcoin and other coins, their cost is predicted, financial forecasts are made, reviews are given on the technical component of the blockage and much more.
Because of the diversity and oversaturation of "expert" opinions, a dissonance is created between understanding the actual situation and the emotions of crypto enthusiasts. The polyphony of the voices is misleading, and especially the newcomers of the industry are experiencing great stress when receiving so much information. To avoid this, it is necessary to identify the most significant and important analysts who base their opinions on technical and economic analyzes.
Conventional traders are puppets
"Bad news makes more money than good news. Whales earn volatility, we are under the influence of a bearish smart market, so any event will be directed against the market, "another user of the crypto blog believes.
This reasoning should not be correct in considering blocking technology, since all participants in a decentralized system are equal. But in fact it turns out that owners of large crypto-currency amounts can manipulate the reaction of traders and purposefully regulate the market for their needs and desires.
For example, in April 2018, the cost of bitcoin fell by $ 200 in a few minutes due to the discharge of 6,500 bitcoins from one whale purse, the state of which at the time was estimated at $ 1.5 billion, and the sale of 6,200 bitcoins from another purse. "Probably, this was done because of whales' desire to gain control over the situation. It's just acting, "suggested Jonathan Benasaya, founder and chief executive officer of IronChain Capital.
The media immediately say that everyone has a cover
"People still can not believe that technology can withstand even the intellect and the influence of the United States. Every time these unbelievers hear the news that bitcoin was hacked, they start selling all their coins immediately and think about the finally bursting bubble, "Reddit's user shares his opinion.
The media, along with social networks, play an important role in manipulating public perceptions. In 2002, the World Bank first published the book "The Right to Speak - The Role of Mass Media in Economic Development", which deals with the indirect influence of the media on the national economy.
"The free press is not a luxury, it underlies fair development, it allows people to express different opinions on governance and reforms, helps to form a public consensus with a view to making changes. Such media help the markets work better. They can facilitate trade, transfer ideas and innovations across borders, "the author of the book Rumin Islam believes.
The fundamentals of interaction and information of the classical economic system with the media flow into block-editions and acquire their own specifics. News crypt channels easily induce excitement, publishing another news about the fall of the course or about hacker attacks. When the Chinese authorities banned the ICO in September 2017, the panic resulted in a serious drop in the price of bitcoin from $ 5,000 to $ 3,000. But even those events that do not have a crypto-currency nature and do not concern the industry, for example, political relations between the US and other countries, will influence the mood of the masses, and therefore, change the crypto-industry.
Some economic experts believe that the news factor affects short-term trading forecasts and varies depending on the source profile. In early 2018, when South Korea's regulators issued a premature statement on the prohibition of crypto currency trading, bitcoin and many altcoins began to fall, while the Chinese coin NEO continued to grow amid the positive news from the Middle Kingdom.
Trust takes time and tests. Fiat money is not safer at all than the Crypto currency
The words of one of the users of r / bitcoin, who answered the question about the reaction of the crypto community to negative news, can summarize the above assumptions. The first payment system - bitcoin - was created in 2008.
Over the ten years of active development, the industry has made some progress in improving the technological process, invented more than 1,500 coins, commissioned crypto-exchange exchanges, gained some confidence from the Finnish banks and, most importantly, ordinary users who can use crypto-coins to pay for some household needs .
Electronic economy, like the classical one, requires humanity to trust and hope for a bright future that will be achievable only with a clear knowledge that the blockade and crypto currency will change our life. In addition, to achieve today's level of economic sustainability, humanity needed more than one millennium, the researcher and author of the book "Sapiens.
A Brief History of Humanity "by Yuval Noah Harari, who speaks about the evolution of economic systems and their success because society believed in them and improved their lives.
"70,000 years ago Homo Sapiens was still a minor animal, living its life somewhere in Africa. In the next millennium, he turned into the ruler of the planet and with the help of his faith in God, he managed to get what he is now in money ... Now the newest technologies will change everything, "Harari writes.