📈 Fed's first cut since 2020: Time to buy the dip? See Tech-focused stock picksUnlock AI Picks

Are You Investing, Or Just Gambling?

Published 12/04/2022, 14:21
Updated 12/04/2022, 15:16
© Reuters.  Are You Investing, Or Just Gambling?

Photo by Keenan Constance on Unsplash

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.

Markets are impossible to predict with absolute certainty.

There is no crystal ball that will tell you the exact movements from day to day. From afar, those that find success time after time may look prescient or clairvoyant – Warren Buffett of Berkshire Hathaway Inc . (NYSE:BRKa) (NYSE: BRK) comes to mind – but in reality, they make highly educated guesses informed by countless hours of due diligence.

Too many retail investors make decisions based on little to no research, opting for gut instincts rather than rational thought. This is evident in any market but perhaps most acutely in the cryptocurrency market.

Cryptos like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) can have wild price swings and behave in a seemingly erratic fashion. And this becomes significantly more apparent when dealing with smaller-cap coins or meme coins like Shiba Inu (CRYPTO: SHIB) and Dogecoin (CRYPTO: DOGE).

However, despite the volatility and apparent lack of logic, there are real factors that can inform the price action of a coin. Take Bitcoin for example. Roughly every four years the rewards doled out to miners on the network are cut in half. This essentially creates a supply shock. And as anyone who has taken econ 101 can attest, a decrease in supply will lead to an increase in price. Historically this has mostly held true.

Smart investors see these patterns and can leverage them for their benefit. This is the key distinction between investing and gambling.

However, many other coins lack predictable markers. Their behavior truly is erratic, and investors can lose when gambling with them. Seasonal Tokens, a new crypto project, has created a system informed by this BTC supply shock to help traders more reliably predict price movements.

The project contains four tokens – Summer (CRYPTO: SUMMER), Autumn (CRYPTO: AUTUMN), Winter (CRYPTO: WINTER) and Spring (CRYPTO: SPRING) – designed to rise and fall in price in a predictable manner.

The price of each token is influenced by its mining rewards and the rewards doled out to those choosing to provide liquidity. By adjusting these rewards, the ecosystem – in theory – can change the relative supply and demand for each token.

With this method, traders can successively trade from each season into the next, ever-increasing the number of tokens they hold and – hopefully – their value.

If you are interested in learning more, check out https://seasonaltokens.org/.

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Read the original article on Benzinga

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.