Hello fellow Steemians,
In the last few months the number of people that I hear or overhear talking about Bitcoin, Ethereum and cryptocurrencies in general has increased significantly. When I’m in the train, when I’m having a drink on a terrace and even when I was in the local supermarket a few days ago! This is an interesting development and a good sign when you think about mass adoption.
But there is something that worries me. There are a lot of people jumping in and hoping for (well, almost counting on) insane returns on investment. I notice this as well on the known crypto forums and here on Steemit. People expect to make a lot of money by just buying some coins without much research and time invested.
A tricky thing is that some think they missed out on Bitcoin and Ethereum and are looking for the next big one. They conclude that Bitcoin and Ethereum are ‘expensive’. In this case, the people that are new to the space are usually not talking about overvaluation when they talk about ‘expensive’. They simply refer to a high price per coin which, in the world of crypto, is basically irrelevant.
In the traditional stock market this actually matters to a certain degree, since you can’t buy half or a quarter of a share. In the world of crypto you can buy 1/10 or 1/1000 of a coin, whatever you like.
In the last few days I’ve come across comments that I think are very dangerous, especially for newcomers. These comments usually go something like this:
- The price of Bitcoin is too high, you should look at other cryptocurrencies that are affordable
- Cheap coins will attract small investors in the future because their price will still be attractive.
- Just invest in 10 cryptos that have a cheap price per coin, if only one of them goes 50X you’ll be rich!
I think this is a sad and dangerous. Attention seems to go to the what I call satoshi coins (like penny stocks on the traditional stock markets). There are hundreds of coins that are under 10 satoshi per coin at this moment.
It is a psychological thing, I know. It feels better to own 200.000 rather than 0.7 coins. But don’t let this fool you. Don’t base your decision to buy on the price per coin before you’ve taken a look at the marketcap, circulating supply and inflation. The price of a coin might be 10 satoshi right now, but what do you think happens when the total circulating supply doubles tomorrow?
Heck, even before that (unless you are more of a technical daytrader maybe), it is probably an even better idea to first pay attention to the team behind a project, the problem that they are trying to solve, the community, the active development etc. Uninformed buying of satoshi coins is gambling if you ask me. It’s just hoping that your purchase goes 100X. But hope is not a strategy...
Alright, that’s all I wanted to say :-)
Not everybody might like what I wrote in this post, but that doesn’t really matter to me. I am just concerned and wanted to share my thoughts. I feel we need to protect the new people a bit ;-)
I would love to hear some thoughts of fellow Steemians, so feel free to drop some comments!
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Disclaimer: I am not a financial advisor, trader or developer. I am just a crypto/blockchain enthusiast. Please do your own research, draw your own conclusions and do not invest any money that you cannot afford to lose.