Hello, I’m the new one.
I’m Marcel, 22 years old, from Germany , studying Business Management and Administration in Frankfurt at the moment and this is actually my first post on Steemit.
I was thinking about what to post and finally a screenshot came into my mind which I recieved by a friend a few days ago.
At first I want to apologize that the screenshot isn’t in english but I’ll translate it.
Dip‘s
So in this WhatsApp group the first Guy writes „ On the Stock-Show at NTV ( one of the two biggest news channels in Germany) they just said crypto currencies will drop further and that they discourage from investing right now because it is very unlikely that cryptocurrencies will increase again“
→ „ Oh Shit Pirmin! It was on the News! SELL EVERYTHING“
I think this describes the situation we had in the last days the best.
In these Days many people say its the end of crypto its the end of bitcoin ….well it is actually NOT. It’s exactly the opposite, it is more or less a healthy correction. If we look at the coin market cap at the moment of the Dip , it was about 600 Billion USD . Do you remember when the last time the coin market cap was about 600 Billion USD ?? Exactly , a few days before Christmas. So it was about 4-5 weeks , so we’re just at the same level like 4-5 weeks ago. But in crypto, time feels like hyper-speed, and days feel like weeks and weeks feel like month and a month feels like a whole year. And if then there is a dip erverybody is freaking out „Oh my god the market is crashing“ and they forget that it is actually a normal level which was the same a few weeks ago. Maybe one decision is to buy the dip , maybe you sell in panic or maybe you just Hodl. At the end of the day everybody has to make his own desicion .
I think Dips like this are absolutely useful , if you look back, the last six month there was no time period which lasts a week were we had a negative chart. If there was a dip , the next day it bounced back. And because of that everybody in 2017 who made money in the cryptomarket felt like he was the ultimate Crypto-Expert, but they aren’t , because nearly EVERYBODY who had money in the market in 2017 made profit . It was not the know-how of the people, it was just because the whole market increased. Maybe this correction should last a few days more because on the one hand it would have the effect that people start thinking rational again and on the other hand that the market is cleaned from the fast-money / pump-people and these guys who spread FUD n‘ FOMO. Because these guys who are looking for the fast-money aren’t able to stick this out for a few days. And this would seperate these people out and would give us some time that the market, people, exchanges and companies could realize the value of several coins and projects.
A few month ago , on the 15th of September on the english lesson I made a presentation about Crypto Currencies. At this time Bitcoin dropped from about 5000$ to nearly 3000$ and some of my classmates who didn’t know much about the whole market asked me if this is the end of Bitcoin or why I don’t sell everything to rescue the rest of the money before the price drops further.
Well, guess what I told them:
My First solutin was to buy the Dip.
Unfortunately nobody belived me instead of my English Teacher , after the presentation he had a bunch of questions and was obviously very excited about the blockchain technology and crypto currencies. I gave him some sources and finally after two weeks of research he told me that he invested 6000$ in Bitcoin at a price around 4000$ per coin. I was very happy about that and imagine how it feels if your recieve a WhatsApp message of your English teacher at 02:30am with a text like „Hey Marcel , what do you think about this ICO….“ . By the way I think the higher the Bitcoin the more he likes me.
Actually he was the only person of the whole class who realized the value of the market.
There we come to a very important aspect. Value
VALUE vs. PRICE
„Price is what you pay, Value is what you get.“ - Warren Buffet
The ratio between value and price:
Everything we see on coin market cap is the price, its the average price which is actually traded on the exchanges. For example if the Korean’s exchanges are removed like it happened a week days ago , the price droped about 10-15%. This has absolutely nothing to do with the value. It is just because of the average price dropped a little bit. That means at the moment it is hard for everybody to define the real value.
If you ask a banker what the current value of Bitcoin is he says „Zero“ , and if you ask the same question an absolut Bitcoin-Freak he would say „ One million Dollar“ so the big question is what the real value of Bitcoin is , and you could have an endless discussion for every coin without a result.
So you have to ask and answer this question to yourself , the one side is the price , and the other is the value.
Once again you have to make your own desicions and define what is the current value for YOU.
If you look at the most sucessful people, they all know that with the time the price adjusts to the value.
People want to know how to calculate the value of bitcoin or ethereum or some other coins. It is more difficult beacuse for example you can’t do a discounted cash flow analyse like for stocks. So you could look how many user are threre , how many are investors, how many are speculating and how many real use the service. Or you can look at the secondary industies which means the industries which are built on a coin. For example exchanges , remittance services, payment methods …and so on. You can also look at the mining fee’s or the transaction fee’s and what would be if the Fee’s would increase a little bit, what would be absolutely ok if the coin price also increases. That are only a few possibilities for you to define the value of a coin.
So bitcoin’s price in the last weeks didn’t increased like the months before, so that could mean the months before was just the forcast for the current price or it could mean that there will be another price increase again.
Moreover there are new technics like sidechains or lightning network which are released in 2018. For example lightning network has over 10.000 channels at the moment or the segwit softwarteupdate has reached a record of 13%.
And this are very positive and powerful numbers if you look a few month back. If you note these aspects and for example the value of Bitcoin a few month ago was X so then at the moment the current vaule is X + Y, and this doesn’t depend on the price, it has definitely more vaule.
And the more people use it the bigger is the value.
This is what’s forgotten by many people.
Please be lenient with me if my English isn’t always correct. I do my very best.
If you liked this post an it helped you , write it in the comment. If you don’t like it , also write it in the comment , I’m new in the Steemit community and this was my first post.
And if you think „Damn this was real good stuff“ then just send me a Tip, beacause you know : Students always need money 😉
Have a nice day
BTC : 178GqBq8hzMKZHMa4SxLXHhbPS83bbxFvx
LTC: LYZ24bb7JtEp27jEr1z2wbnNg4iLGRB8Mk
ETH: 0x21f612a2329963c330538ff51522ccd18728064d
Thanks for reading & response
Marcel McMaffl
I share your point of view with regard to putting into proper perspective the current dip in the Bitcoin price series .
However, in the course of trading currencies and stocks over a period of nine years, I have come to see that the view that the price of a financial asset is a Markov Process is surprisingly valid just like the weak form of the Efficient Market Hypothesis.
The long-term outlook for Bitcoin is quite bullish, but no one knows how far the current correction will go - or even whether the correction will snowball into a trend reversal. Through my analysis, I have determined that as long as price remains above $8500, it is still a bullish market.
Already, I am beginning to see the signs of a trend continuation to the upside.