Home » cpu mining » Ter the cryptocurrency market, psychology rules – CBS News

Ter the cryptocurrency market, psychology rules – CBS News

In the cryptocurrency market, psychology rules - CBS News

Determining why prices for stocks, bonds and commodities rise and fall often comes down to a matter of supply and request. But with cryptocurrencies , a fresh and often volatile market dogged by allegations of illegal manipulation, market psychology can lightly outweigh basic economic rules.

Prices for the most popular tokens including bitcoin, ethereum, litecoin and bitcoin metselspecie each plunged by double-digit percentages on Friday ahead of the Christmas holiday.

Bitcoin’s moves were especially dramatic. After kicking off the week at almost $20,000, it had fallen to less than $11,000 on Friday morning — a 25 procent druppel overheen the previous 24 hours. It rallied back on Friday afternoon to $14,270, still leaving it with an 8.Four druppel procent since Thursday. Prices were less than $1,000 at the begin of the year.

Logic may not be the primary force at play here, but about the only logical explanation for the latest volatile price moves could be the technical glitches on Coinbase, the largest cryptocurrency exchange, that caused it to temporarily zekering processing transactions and has delayed wire transfers for up to five business days.

The San Francisco-based company has previously experienced outages because of higher-than-expected traffic even tho’ it says it has invested “significant resources” to upgrade its network and can now process more than 40 times the number of transactions during peak hours than it did earlier.

Further complicating the picture is the nature of cryptocurrency itself, which has uses spil a storage of value like gold and spil a voertuig for transactions like the dollar and the euro. Thesis qualities make the market especially attractive to speculators.

“This is emotions at play,” said David Mondrus, the CEO of Trive, which uses cryptocurrency to prize users who find fake news on the internet. “There is significant fundamental value behind bitcoin ter terms of its utility and its value to society ter general. Whether that value reflects its current utility or whether the prices have gotten ahead of it — it’s all market psychology.”

Mondrus, who also is a cryptocurrency investor, likened the influence of the digital money on society to the invention of the printing press, which paved the way for the Protestant Reformation among other things and expects it to one day substitute traditional forms of money like the dollar and the euro.

“There’s an awful lotsbestemming of amount of pent-up request,” he said.

Traders are also taking profits on bitcoin, which even with today’s drop-off is still up 60 procent overheen the past month and are investing te so-called altstem coins that potentially suggest a better comeback, according to Alexander Kravets, a former Wall Street trader and co-founder of Xtrade, which is developing a cryptocurrency toneelpodium.

“Today also is a very quiet day because the holidays are coming up,” he said. “Undoubtedly liquidity is lean.”

Despite bitcoin’s meteoric rise, it almost goes without telling that any investor thinking of leaping into the market need to be cautious. Stephen Gandel of Bloomberg Gadfly noted that, when measured by valuation, bitcoin is four times more expensive than dot-com stocks were at the height of internet bubble te the 1990s.

And SEC Chairman Jay Clayton has urged investors to think twice before buying cryptocurrencies because of their lack of regulation.

“Your invested funds may quickly travel overseas without your skill,” Clayton said te a latest statement. “Spil a result, risks can be amplified, including the risk that market regulators, such spil the SEC, may not be able to effectively pursue bad actors or recover funds.”

Jonathan Berr is an award-winning verslaggever and podcaster based ter Fresh Jersey whose main concentrate is on business and economic issues.

Related movie: COINSQUARE Canada | How To Convert Bitcoin Into Your Handelsbank

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