We have seen the level of uncertainty and volatility in the crypto market, not surprising there. It is known to all traders that you only make any real money with volatility. The question we must ask ourselves is how much is this due to animal spirits or market manipulation. Animal spirits – a term coined by John Maynard Keynes – represent the confidence, fear, and pessimism that impact the decisions that fuel or hamper economic growth. One can make an extrapolation as regards the crypto market. Is the current level of volatility due to fear, a lack of confidence, and pessimism? I strongly believe this is part of it but not everything. Sentiment in 2018 is way more pessimistic compared with last year’s exuberance. Bitcoin price fall from $20k to just under $7k will certainly be part of bringing down the confidence of investors and traders.
This leaves market manipulation. How much of an influence has this been? Recent investigation by some regulatory bodies is evidence enough that something must be going to bring this about. Market manipulation is a deliberate attempt to interfere with free and fair operation of the market and create artificial, false or misleading appearances with the price of, or market for, a product, security, commodity or currency. Sudden massive movements of bitcoin prices certainly feel this way. Despite animal spirits, investors still want some level of stability. For those of you still in doubt, I suggest you read the following article: “The Three Types of Cryptocurrency Traders that are Kicking your Ass”. This story may surprise some of you. In my humble opinion, I suspect the recent price movements have come from a bit of both but then again, your guess is as good as mine.
Swap your cryptos here:
Nosa Capital concentrates its' expertise in Strategy, Business Development, Project Management, Project Finance, Trending, and now cryptocurrencies