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I would say 95% of investors don't understand crypto, whether they have high or low risk tolerance. But high risk tolerance investors are more likely to invest
by ErikVandeWater 5y ago
I would say 95% of investors don't understand crypto, whether they have high or low risk tolerance. But high risk tolerance investors are more likely to invest in something that has momentum without understanding the fundamentals. Betting with the momentum is often a good strategy.
- totalZero 5y agoChange that to "95% of crypto investors don't understand crypto" and you've got it. Betting with the momentum works unless (A) you're a latecomer to a ponzi scheme, or (B) there's a reversion that catalyzes longstanding doubt about an asset that has enjoyed a bull run. Both of these cases may well be applicable to a large portion of the overall crypto marketplace.
- WalterBright 5y agoMore simply: "Betting with the momentum works until it tanks."
- jjeaff 5y agoOr (C) you don't have a crystal ball that tells you when to get out before the inevitable collapse.
- TaupeRanger 5y agoTell that to investors in Fitbit or Palantir (for example) before they sold off after having good "momentum". Crypto investors don't even understand crypto, but that doesn't mean anything, because you can be left holding a long term bag whether you understand the underlying asset or not.
- andrewprock 5y agoIf you actually understand a "momentum" asset, you will definitely not be left holding the bag.
- 55555 5y agoPlease elaborate?
- TaupeRanger 5y agoIf you actually understand "investing" you will understand that you can't beat the indexes and are doomed to failure by trying to use "momentum" to do anything other than lose money.
- nly 5y ago"Momentum" is bullshit reasoning to buy anything as volatile as crypto. The only reason investors struggle with crypto is because it has no "fundamentals" to analyze.