7 Lessons I Learned from 7 days of Crypto Trading

For the record, I am not new to cryptocurrency. I have always advocated for secured digital network currency and believe that developing a commercially viable tokenomics model could add real economic value to the cryptocurrency. I also authored two ICO whitepapers back in 2018 when ICO was hot, and even grandmas were investing in new ICOs hoping they get a quick return.

However, I have never played in crypto because of two reasons; scams and unrealistic market value. However, last Friday, I received a compelling message and decided to give it a go. Here are what I have learned in the past seven days.?

1- Pick a simple trading platform

I downloaded Binance . However, Binance could be overwhelming for beginners and experienced traders alike. It has many features, jargon and even to be able to buy and exchange, you need to have a PhD in trading.?If you are new to cryptocurrencies, chances are that you are caught off guard by the immensity of information and the new terminologies you are bombarded with. Pick a platform for crypto trading that has a user-friendly and simple interface. It needs to be easily accessible, welcoming and effortlessly navigated. It took me almost 2 days to understand the Binance interface and features.

2- It's not a safe trading market.?

Although Binance offers a relatively secure, versatile way to invest in and trade cryptocurrencies, it can't help you with pro-scammers and fraud. In fact, if you deposit or transfer crypto to another person's wallet, there is no way to get it back. In my case, I asked them if they could track the buyer, and their answer was simple; the transaction's identity is anonymous! Therefore. if you pay somebody with crypto, there’s typically no customer service agent you can call to process a refund if things go sour.

3- The perceived value?

Cryptocurrency is not the same as the U.S. dollar because there is no central authority, such as a central bank to manage its value. Without a centralized organizing body, there are no concrete reasons for cryptocurrency to change in value. The majority of cryptocurrencies in the market are not asset-based and therefore their values are simply driven by people and market demand.?They are simply worth what people are willing to pay for them in the market.

4- There’s only one metric in crypto trading

You either win or lose. It’s simple. It is either right or wrong. It’s not hazy like a real marketplace. Right is making money. Wrong is losing money. If you’re losing money and still telling yourself you’re good at trading, you’re straight-up lying to yourself. Unlike the stock market, which provides a venue where companies raise capital by selling shares of stock, or equity, to investors, crypto doesn't give the buyers voting right and dividends.

5-?The crypto market is still super volatile?

During the 2018 ICO Gold Rush, most of the projects had one or a few influencers helping them to get public attention. And they still do. In 2021, Elon Musk announced that customers could buy Tesla cars with Bitcoin. So naturally, this piece of news pumped the price of Bitcoin. Later that year, he tweeted again, and this time he mentioned that he believes Bitcoin is not environmentally friendly. Don't underestimate influencers.

6- Cryptocurrency is bad for the economy?

I shouldn't say this, but the fact is crypto trading doesn't create a real economic value. In fact, it is against the economic value creation principle which means it is bad for the traditional economy. In the 14 years since #Bitcoin emerged, advocates have made promises that crypto will revolutionize money, payments, finance, or all of the above. These promises remain unfulfilled and look increasingly unfulfillable. Crypto trading could pose risks to the stability of the traditional economic and financial system.

7- The cryptocurrency market is a bubble

A bubble is defined as a period when the price of an asset rises above its intrinsic value, which then loses value quickly when the bubble bursts.?The fact that all cryptocurrency is just a bubble is probably its worst-kept secret. The money that fuels the massive price rises comes solely from other investors pouring their money into it, in the hope of riding the surge. You should buy them only if you have no other way to throw away your money.

In conclusion, regardless of the name of the cryptocurrency, whether is centralised or decentralised, the trading platform, and the influencers behind it, as long as it generates wealth out of thin air, there is a lot more reason to be sceptical.

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