Is It A Free Fall From The Crypto Moon Or A Dive Into The Kids Pool?
The three types of people reading this post:
- Those who give a damn or two about crypto – Potential traders or investors
- Those who don’t want to be left behind in the trend-banter – The Social Butterflies
- The curious ones, who actually enjoy learning more – The Intellectuals
What does risk in Cryptocurrency mean to The Investors?
Investors buy things or assets, to be specific, to make money out of them. A profit. Anything that hampers their chances of making a profit, it a risk. For example, You buy a bunch of bitcoins today. Relying on the assumption that the price of each bitcoin will rise in the near future, say next week. Everything that is likely to prevent this from happening is risk on your investment. Risk is contingent to a number of things. It could be that the reputation of Bitcoin has been smeared overnight, other investor – who also influence the price through demand may have shifted to another network, the competing currency may inflate while the price of bitcoin may start to collapse. Anything could happen in two weeks.
Currently, regulatory bodies pose a risk to the prices of these currencies, their faith affects the price because prices are too volatile and vulnerable to hearsay. This makes things complicated. But, in the longer run, it is likely to resolve as things will streamline for the industry and laws will be in place to maintain order.
To the investors risk means monetary loss.
What does risk in Cryptocurrency mean to The Social Butterflies?
For the social butterflies it would suffice to say that risk is a horribly shaky ride, it is a leap of faith that the investors take before they can make money or earn reward. It is a jump from one cliff to another, with the underlying assumption that the steep fall and gravity will not suck you, and in this fairyland, sometimes you don’t get sucked by gravity that wants to pull you down so hard. And you end up staying mid air or safely land onto the other cliff.
What does risk in Cryptocurrency mean to The Intellectuals?
So risk can be averted with true information, complete information or a concept known as absolute information. If you have heard of it, you will know that absolute information in fast moving markets is actually impossible. Technological advancements are quickly changing things in the ecosystem. More and more businesses are jumping into the risk analysis and risk calculation, trying to make things easier and more steady. This will smooth out the ridges and make trading and investing easier.