The Cryptocurrency Crash from 2017: A warning story for dealers
In the world of finances, only a few events can be observed as fascinating as the rise and fall of cryptocurrencies. In 2017, a single tweet of a now famous pseudonym for Bitcoin, which led to it fell from $ 19,666 to a low of $ 2,886. This event is often referred to as a “rect” moment, a term committed for those who have fallen victims to trade errors.
What did the rect cause?
The crash was precipitated by a combination of factors. An important contribution to the transfer of hype and speculation. Many investors had bought promise of an “infinite value” in Bitcoins, just to leave only worthless paper when the price collapsed. This phenomenon is known as a “whale” psychology in which large amounts of money are invested in a certain asset, often due to a charismatic figure or unrealistic expectations.
Another factor was the lack of regulation and transparency. On the cryptom market, there were no clear guidelines on security, custody and settlement processes, which was susceptible to hacks, phishing attacks and other forms of financial exploitation.
The lesson of the Rekts: Do not follow the hype
So what can we learn from the rect? Here are some important snack bars:
- diversify your portfolio : Just because you have invested in Bitcoin does not mean that you have to think it is forever. The diversification is of essential importance for the treatment of the risk and reducing the effects of market fluctuations.
- Be careful against Hype : Be careful with exaggerated promises or exaggerated claims about the potential of a certain asset. Remember nobody can predict the future with certainty.
- Do not pursue any profits at all costs
: stop pursuing returns by investing in assets that are not well suited for their risk tolerance and their financial goals. Here emotions come into play; It is easy to be involved in the excitement of a powerful wealth value, only to later recognize that you have made a mistake.
- Concentrate on the basics : Understand the underlying mechanics of a wealth value and your potential risks before investing. Do not only rely on hype or marketing claims.
The legacy of the Rekts
The 2017 crash served as a wake -up call for many investors. It has the meaning of: emphasized:
- Risk management : Investors should be willing to accept losses and have a plan for managing the risk.
- dollar cost agent : The timing risk can be reduced at regular intervals and the volatility of the market can be avoided.
- Use up : Investing cryptocurrency requires continuous learning and research. Stay up to date, but don’t just rely on hype or speculation.
Diploma
The rect serves as a warning story for traders of all levels. It reminds us that the cryptocurrency trade is naturally with high risk and high reward and should be addressed with a clear understanding of the market and our own risk tolerance. By learning from the mistakes of others, we can avoid similar pitfalls and appear more on the other side.
Additional resources:
* “The Bitcoin Bible” by Andreas Antonopoulos : A comprehensive guide to invest and trade in cryptocurrency.
* “Trade with cryptocurrency” by Michael Saylor : Insights into the world of cryptocurrency investment and in the market trends.
Remember in the words of Tim Ferriss: “You don’t have to be great to start, but you have to be great.” Don’t just dream of making it big. Take measures, learn from your mistakes and build a solid basis for long -term success.
