There is a massive growth in interest in the trading of crypto currencies. This is without doubt no more than gambling by another name.
Too many people enter into these transactions with no real appreciation of the true level of risk involved.
Like all forms of gambling there are three participants, the winners, the losers and the faciltators. The facilitators of course always win whereas the other participants can be winners, losers, or both. Ever since the first gambling proposition this has always been the case and it will be for ever more.
For a gambler to win there must invariably be a loser and another party at the side dipping the pockets of both winners and losers alike.
Whether it is the house rake at a poker table, the owner of a hardware store during a gold rush or an online currency trading site the fundamentals are the same. The facilitator only seeks to maximise volume with no altruism whatsoever involved.
Of course, there are those participants who have an edge and those who are poorly informed or gullible. An excellent poker player will almost always beat a poor one to gain an edge however I am not sure where someone dealing with crypto currencies would ever be able to gain an edge.
So in summary to me Crypto Currency Trading is little more than investing in a less than totally transparent form of gambling with no guarantees for anyone other than the facilitator.
There do seem to be lots of studies that show how hard it is to beat the system - with such a high failure rate it makes you wonder if even those minority who succeed over a decent sample of time have done so through luck as much as / more than through judgement.
- One study of Brazilian futures traders found 97% of day traders lost money over a period of 300 days.
- Another study of day traders in Taiwan between 1995 and 2006 found only 5% of day traders to be profitable.
- A study by the U.S. Securities and Exchange Commission of forex traders found 70% of traders lose money every quarter on average, and traders typically lose 100% of their money within 12 months.
- A study of eToro day traders found nearly 80% of them had lost money over a 12-month period, and the median loss was 36%.
That said, it seems remiss to not throw a bit of savings & investment into a sensible and diversified crypto portfolio, hodl, stake & earn, hope to see big gains in a few years time. Just always have diamond hands and don't start chopping and changing through the inevitable roller coaster ride :)