Familiar recipe, familiar taste.
The digital currency market right now is becoming more and more like the A-shares of earlier years. Similar to the early stages of A-shares, hundreds of cottage coins are having a wild time as major weighted varieties like bitcoin consolidate.
Speculation on small, new, and low-priced stocks was originally a market phenomenon unique to the early years of A-shares, with the most recent, more pronounced style occurring in 2012-2014, featuring the elimination of small-cap, low-priced stocks. And as more and more A-share traditional stock investors entered the digital currency market, the investment behavior of the cryptocurrency circle began to have a significant stock color. After the bitcoin price stalled at $60,000, speculation on small, new, and low-priced became a major spectacle in the digital currency market this year, and the dog coin, which started pulling up from a few cents, even rose 300 times in the recent year.
Coin hype low priced varieties attributed in stockholders?
As stockholders flock to the digital currency market to open accounts, the investment behavior of the cryptocurrency community has become more and more stock-based, especially since most of the world’s major several digital currency trading software comes from China, which makes Chinese retail investors, who have been extremely influential in the global digital currency market.
For the digital currency market, as more and more stock investors, converge with digital asset investors, the new influx of digital currency investors bring the original stock market when operating style, into the digital currency market. The massive blowout of digital currencies during the upward phase actually reflects the fact that traditional stock investors who are used to using financing and financing accounts in A-shares, have entered the digital currency market.
The brokerage China reporter noted that a new batch of new coins listed this year generally gained 5 to 10 times in a very short period of time. For example, the LIT coin, which was listed in February this year, has seen a price increase of up to 75 times since its listing, with a price increase of 33 times still to come as of May 8, 2021.
The new coin TKO, listed at the beginning of April this year, had a maximum increase of 100 times after listing, and although it has since retracted, the price of the new coin has increased 36 times in just one month’s time, with a market value of more than 2.5 billion yuan, which is equivalent to a small A-share stock.
There are also many users on Weibo, an investor in the speculation of new coins, low-priced cottage coins, there are investors in a year’s time, 30,000 yuan account into 230,000. Some investors bought digital currencies at a cost of 2,000 yuan in early April, and in a week’s time, the account assets exceeded 15,000 yuan. “Most of the retail investors who really make money are the ones who make a lot of money with a small amount of money” Some investors in the digital currency market also believe that the probability of making money with a few thousand or tens of thousands of dollars of speculative coins is often greater than those who invest hundreds of thousands of dollars.
This year’s digital currency market, the most profitable is the low-priced cottage coins, especially when the price of bitcoin exceeded $40,000, the cottage coin market began to start, and when bitcoin when the price touched $60,000, and launched a wavelength of two months of adjustment market, the cottage coin hype into a more frantic state.
The 10% Critical Time for Cottage Coin Investing
The investment logic that exists here is that the higher the price of bitcoin, the greater the probability of a pullback and the greater the likelihood of money flowing back to lower-priced cottage coins.
After Bitcoin officially broke $40,000 in January of this year, analysts in the cryptocurrency market began predicting that cottage coins could recover and that the price increase could be even more dramatic. On January 21 of this year, cryptocurrency trader and analyst Rekt Capital said that the small-cap cottage coin’s rally will be stronger than ever before for ethereum. He said the rally would be big to make up for their long history of underperforming without a pull.
On Feb. 5 of this year, Santiment, an analytics firm for cryptocurrencies, released a report saying that Bitcoin’s social discussion rate has fallen back to a two-month low with all cryptocurrency topics. Based on historical market trends, Bitcoin and cryptocurrencies usually alternate their rally cycles.
For example, Dogcoin’s price on January 8 of this year was RMB 0.06, while on May 8 it was RMB 4.69, a 77x price increase so far this year, and nearly 300x in the most recent one-year period. Dogcoin is a typical low-priced variety inside the more well-known coins.
In addition, mid-cap varieties like EOS have also made a splash in the past week, soaring from a high of $6 to $13 in a week’s time. EOS, commonly known as grapefruit coin, it also has a market cap of over RMB 60 billion.
However, the above-mentioned cottage coin profits apparently all occurred within a critical 10% time frame, but just like retail investors in A-shares, it is difficult to seize such profitable opportunities unless one is patient enough and the nature of the funds is small and idle.
According to the response from Guoxin Securities, as well as screenshots of chat logs circulated on the Internet, there is an ama in Dalian who bought 50,000 yuan of Changchun High-Tech in 2008, then forgot about it and only recently went to cancel her account to find out that she actually had more than 5 million yuan. This is a good example of the important impact of the idle nature of money, small amounts of money.
For example, the dog coin, which has risen 100 times in the recent year, its price stays at the lowest price level 99% of the time, and the time has been horizontal from November 2018 to October 2020, with a low-price horizontal time of up to three years. the low-price horizontal time of EOS is even longer than four years.
This has similar characteristics to the situation in the stock market, where 10% of the time determines the profitability of investors. A public fund manager in Shenzhen previously explained the effect of long term holdings, said the stock profits in time is uneven, if the long term holdings of a variety, and not in the most critical 10% of the time, the final rate of return will be a huge difference.
How long can the “bubble” market last?
How long can the cryptocurrency market last? This is probably one of the most talked about issues in the digital currency market.
While cryptocurrencies have benefited from Bitcoin’s decline, the obvious question is if Bitcoin truly loses value, or if it becomes worthless, then cryptocurrencies could be in even worse shape. Only in that, ethereum, the biggest mainstream of the cottage coins, seems to be enjoying a high moment, as its total market cap has reached CNY2.63 trillion, making it the second largest in the world and second only to bitcoin in the digital currency market.
Veteran trader Scott Melker said that ethereum is likely to outperform bitcoin in the short term. melker believes that ethereum’s outstanding performance is the main catalyst for the recent bull run in the cryptocurrency market, and that ethereum could reach its price target of $10,000 by the end of 2021. He also revealed that over the past few months he has seen “tremendous upside potential” in ethereum and has largely shifted his average cost strategy from bitcoin to ethereum. For me, it’s like investing in the Internet in the early 1990s,” he said.
Cryptocurrency ratings agency Weiss Crypto Ratings says ethereum is leading the way for cottage coins and appears to be on track for a cottage season climax. However, if and when bitcoin loses value, including ethereum and others when cottage coins lose even more value; and when bitcoin gains value or stagnates, cottages jump up like crazy. This has been the case with every cryptocurrency bull market.
PrimeXBT analyst Kim Chua, who has studied some of the cryptocurrency activity, said that even though there have been some “strange phenomena” and some cryptocurrency prices have risen dramatically, she still doesn’t think the cryptocurrency market is in a bubble. She added: “Personally, it’s a sign of the times. I don’t think DOGE is in a bubble, it’s just people rebelling against powerful control, and I hope there will be more of these events in the future, it’s a change in market behavior, not a sign of a bubble, it’s here to stay.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/this-cryptocurrency-soared-300-times-in-a-year-how-long-can-the-bubble-blow/
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