Pump and Dumps are a Killer, The Wise Investment Is a Thriller.
The value of any coin is not in the pump or hype, its in the usefulness of the tech. If at the end of the roll out, the coin does what it says it will do, adoption will follow and the market will price it where it needs to be. People who pump up a cryptocurrency serve the purpose of bringing attention to the project, but it is still up to the individual to exercise good judgment and common sense in regard to any claims and to invest or not invest accordingly.
The difference between a good coin and bad coin is often seen differently by different users. If a coin goes up rapidly in value and then crashes, the people who got in at the top and lost will feel cheated. But someone who believes in the project because of the utility of the coin, wont care as much about short term volatility and will hold on for longer term returns.
Hoping for a quick return, in my opinion, makes you a trader. Holding for the longer term gain, again in my opinion, makes you an investor. I think its important to know which one you are, it will help you set and manage your expectations accordingly.
I also think it would cut down on people shouting "scam, scam" the minute they lose a part of their investment or it doesn't perform in relation to the hype they have read online. In turn, it will cut down on legitimate projects being slandered by people who are bitter over losing money because they didn't fully understand the project they were investing in and who had set unrealistic time lines for a return on their investment.
Hype can never replace doing research on the utility of the cryptocurrency you are investing in.
Some simple questions to ask yourself is:
- Does it work as advertised?
- Is it secure?
- Is it private?
- Does it lend itself to mass adoption?
- Is it easy to install on any operating system or device?
- Is it fast?
- Does it have a good development team?
Those are just some of the questions people should ask themselves before investing in any cryptocurrency for the long haul.
If you consider yourself a trader, then these questions are not as important as you wont be staying in any coin for very long. A trader needs volume, and volatility. People moving in and out of the coin and regular price swings up and down. A trader should realize that those swings can work against them and you could end up a bag holder for a while or even permanently.
This shouldn't be construed as investment advice as you are responsible for your own decisions. But hopefully this will get you thinking about what sort of investor you are and perhaps encourage you to do more thorough research into any project you may be thinking of putting money into.
Let me know what you think in the comments below.