Too many people think that cryptocurrencies are their ticket to becoming a millionaire. This leads them to have false misconceptions about the crypto market and make suboptimal decisions.
You are more likely to hear about the one guy who made a million than the 100 who lost their investments. This is down to the common logical fallacy of survivorship bias.
2️⃣ Day Trading Will 2️⃣
This is the notion that the best way to generate quick gains is through crypto day trading. The problem with this is that daily crypto moves are incredibly hard to read. They are idiosyncratic and often don’t follow predictable trends
3️⃣ Leveraged Trading Will 3️⃣
There is a narrative out there that seems to say leverage trading is a quick way to multiply your gains. However, the sad reality is that most retail traders end up getting absolutely rekt
4️⃣ Retail Can Impact Markets 4️⃣
In reality, the bulk of crypto trading volume (especially for the more liquid cryptocurrencies) is controlled by large investors, institutions
According to a Chainalysis report, 4% of the active Bitcoin traders control 85% of the volume in the markets.
5️⃣ Bitcoin & Environment 5️⃣
There is a mainstream narrative that Bitcoin is bad for the environment. This has been pushed by Elon Musk and is being used as a reason to regulate it.
This is untrue as Bitcoin uses cleaner energy sources than most other energy users. It uses 75% from renewables whereas the bulk of energy use is at about 27%.
6️⃣ Bitcoin is Centralised 6️⃣
What people need to understand is the difference between the Bitcoin network and the miners on the network. The network itself is a collection of nodes that store the Bitcoin blockchain
Just because most of the miners are located in one country does not make the network centralised.
In fact, if we were to take a look at the geographical distribution of Bitcoin nodes across the world, it is incredibly decentralised.
7️⃣ Governments Can Shut Down 7️⃣
There is a conception that government can restrict open source and peer to peer technology. More recently you have had countries from India to Nigeria, Turkey to Russia.
The only problem in their plan is that it physically cannot be done. The nodes are all around the world and as long as there is an active node somewhere the network is likely to live on.
8️⃣ Bitcoin is For Criminals 8️⃣
Many people think that Bitcoin is being used for criminal acitivity whereas in reality the bulk of most of the activity (99.5%) is for completely legitimate purposes.
9️⃣ Bitcoin is Private 9️⃣
Bitcoin is one of the most traceable type of money on earth. Everything that is done on the blockchain can instantly be see by anyone who has a blockchain explorer.
🔟 Maximalism 🔟
According to the die hard maximalists, there is only one true cryptocurrency that will last and that is Bitcoin.
This is untrue as we know that there are many use cases that Bitcoin just cannot meet. Everything from privacy preserving to smart contracts and scalability.
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📜 Disclaimer 📜
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading Forex, cryptocurrencies and CFDs poses considerable risk of loss. The speaker does not guarantee any particular outcome.
