The Cryptocurrency Market Is Now All About Speculation and a Game of Money
Note: The article was written by Duan Hongbin, a financial consultant and columnist. He has books like A Stepping Stone to Success Investment to help people learn more about investment. Here is his wechat account: laoduandeguandian. Remember, this is the translation, so if you get upset or feel offended when reading it, it has nothing to do with Cindy.
I started investing in bitcoin in 2011 and altcoins in 2013. But now I am writing to talk my readers out of investing any cryptocurrencies. Seriously, don’t buy any cryptocurrencies. Just ask yourself this question: Can they do any good to your real life? No, they can’t. It is all about speculation. If you started with 100,000 yuan and ended it up with half a million yuan, well, good for you; if you ended up with 10,000 yuan, then I feel bad for you.
In 2013, I recommended Lottery Tickets（TIX) to my readers. At that time, the price of per TIX was 0.00006 yuan and it skyrocketed immediately thanks to my recommendation. (I’m just telling the truth.) Unfortunately, the price had remained flat in the following three years and some people mocked me:
“why recommended lottery tickets? Don’t you have anything better to do?”
Well, data is worth a thousand words. The price of lottery tickets is 0.00009 yuan, increased 50 percent than that of in 2013.
Frankly, I have been away from the cryptocurrency world for a while. Now I am doing low-risk investments and the annual returns are pleasant. I understand that for some people, if they don’t take this chance they will never be able to get rich. But for those who are already enviably rich, why get involved in such a complicated game?
And now Chinese investors are eying altcoins. They have some money, but don’t know which investment is perfect for them. The stock market in China is not good and the housing prices are ridiculous. Plus, the Chinese government works to crack down on illegal exchanges. And they worry it’s too late to buy bitcoin, so they decide to buy altcoins, Doge, XRP, Dash, just to name a few.
Today something really weird happened to me. An old hand in the stock market came to me asking if cryptocurrency investment is lucrative.
He told me that The the China Securities Regulatory Commission (CSRC) has been really tough on the stock market. If you happened to offend certain rules, you will go bankrupt to pay sky-high penalties. So he thought maybe he could look for other options in the cryptocurrency market.
I laughed that:
“You are like a crocodile and the cryptocurrency is just a pond. It is too small for you to stretch your muscles. “
But he insisted, saying “I’m not doing anything right now. Why not make some small money? Here is an idea. I can push up a coin’s price and you help me sell it.”
“Sorry, not interested.”
In 2013, CCTV-2 Finance Channel spent half an hour reporting the spike of altcoins. But this time, there are virtually no news about the price rise of altcoins in mainstream media. So what’s behind the rally?
Take litecoin for example, as the time of writing, the price of per litecoin has reached over 35 USD. And The spike coincides with its addition to Coinbase. This suggests speculation is a strong component. People Pump LTC before segwit activation and sell later. When the bubble bursts, you’ll have every reason to cry.
Remember, history repeats itself, first as tragedy, then as farce.
Anyway, I am not investing a penny in cryptocurrencies anymore.