Speculative trading of cryptocurrencies carries high risk since price fluctuations are very high.
Individuals who are not accustomed to trading should be especially cautioned, as speculators rely on unseasoned investors buying after large upside moves on the market, when they themselves take advantage of the opportunity to sell at the same time. Same goes for large downward price swings, when unseasoned traders panic sell out of fear of prices going further down. This is when speculators use the opportunity to accumulate. This game is played in all markets and inexperienced investors usually lose money in such fluctuations. There is always someone who buys at the highest prices and someone who sells at the lowest prices.
Therefore, it is particularly cautioned to unseasoned traders to engage in irresponsible high leveraged trading of Bitcoin without responsible risk management.
Cryptocurrency prices will continue to be highly volatile while there is no general economy using the currencies. When the economy starts using cryptocurrencies, supply and demand will no longer only move because of speculation in the market, but because of real need for the coins. Subsequently, the market will find more stable prices for cryptocurrencies followed by reduction in risk.
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