Many people start to panic when they see crashes in the crypto markets, but volatilities are part and parcel of any markets. The crypto market is in fact, going through the same cycle as the traditional financial markets but due to technology and the rapid spread of information, the transitions between each phase of the cycle accelerates. As time goes by and as we see the market become more informed, and have higher liquidity we would see lower volatility. Such is evidence as the more mature cryptos like Bitcoin tend to be less volatile than the newer cryptos.
Investors are more careful with their money now. They are looking for ICO that has real potential to contribute to both the ecosystem, that has adaptability and which adds value to their portfolio. Many ICOs out there are merely trying to raise funds. They fail to answer three of the most critical questions that any investors would want answers for.
1. Why would anyone buy the tokens?
2. Why would anyone hold the tokens?
3. Why would anyone use the tokens?
In the end, as markets become more selective and informed we would soon see an auto selection cause by survival bias. Market forces would automatically eliminate weaker ICOs and cryptos. This is a good sign, as it shows maturity.
I have never doubted the practicability and potential of BC and cryptos, but in the end, it is us, both the advisors, ICOs, and participants that can make or fail this ecosystem. At least for the short run, I am predicting:
1. More partnerships, even between competitors as for now the pie is still big enough for most to share and cooperation to tap on share pools seem to be more logical than any competition.
2. More clear directions on regulations, while we cannot predict exact rules and regulations, we are starting to see the stand of each government, and thus be able to better plan strategies and implications.
3. A more educated public would know the potential and limitations of cryptos and blockchain as well as their applicability and restrictions. Having such an educated populace would both drive the growth of BC and cryptos as well as act to lower the volatility of the market.
BC and cryptos are still on the growing stages. It has to go through what all other markets do. My advice is, study and know what you invest. It is the process of reviewing and researching that is more important than the decision to buy or sell. Understand, and have patience, this is not a quick buck program, this is something that has potential in the long run, which is why we should not worry about short-term fluctuations in the market.
The best strategy is research and knowing which ICOs and cryptos do add value and have real potential then buy a bit at a time when there is a falling trend. No one can predict when the highest and lowest price points, so do not even try to predict. Also, remember to diversify, I cannot stress enough that no one can pick the best ICO and best crypto.