Should you start investing in virtual currencies? ｜How to invest in virtual currency safely?

Hello everyone, I'm Charles, I think the word virtual currency must be familiar to everyone, so how do you think about virtual currency?
I really didn't expect to share what is NFT? Is this one of those capitalist hype games? real case scenario? Not long after that, such a big event happened.

A major event that happened in the currency circle recently shocked all the investors in the currency circle, and all their positions were liquidated overnight! I think if you are also active in the currency circle, then you must also be thinking in your heart, can you continue to invest in virtual currency in the next 2022? But anyway, things have happened, I hope you are not one of the victims, so if you are a novice, should you start investing in virtual currency? Let's take a closer look at this issue today.

www_slon_pics on Pixabay _

LUNA Coin Crash Event

First of all, let me briefly explain the incident. The virtual currency LUNA, which has the reputation of "Moutai in the currency", has suffered a serious crash recently. It is not a general crash, but a crash of 99%! Even close to zero.

LUNA currency used to be the fifth largest virtual currency in terms of market value in circulation. It once rebounded to a record high of USD119 after a 50% plunge in the early stage, but it has recently crashed severely, plummeting 99%. Yes, I believe this news, to a certain extent, has frightened a group of friends who intend to start investing in virtual currency, so what do you think? Do you know what caused such a severe crash? Today, I believe that what I have said may change your consistent investment underlying logic, and you will have one more thing to consider in your investment career in the future.

It is very normal for investment to fluctuate, but this time the collapse of LUNA was not caused by the normal market trading mechanism, but was blocked by the traditional financial Wall Street Blackstone and Castle Fund. This wave of empty-handed white wolf operations is quite incredible Yes, first of all, Blackstone and Castle Fund borrowed 100,000 bitcoins or about 4 billion US dollars to short bitcoins, LUNA (borrowed or bought), abruptly shorted/sold bitcoins worth 40,000 US dollars to 34,000 US dollars , With this wave of operations, investors panicked, coupled with the recent interest rate hikes and the evolution of the international situation, ordinary investors rushed to short/sell, causing LUNA to plummet. Presumably everyone knows that the prices of many stable currencies are bound to each other, so with the plunge of Bitcoin, the bound UST plummets, and UST is built on the LUNA system ( That is, UST has US dollars as a margin, and uses an algorithm to form a 1:1 value ratio, making the currency less volatile and highly secure, which is an algorithmic stable currency), so when UST is pegged to the US dollar and fails, UST will plummet , and LUNA also collapsed!

How about it? Seeing this, how do you feel?

It is well known that the virtual currency [crypto currency] is not issued by a specific country or region. The issuers are generally institutions or companies. For virtual currency, it has no use value (it can be used like a car or a house), and there is no asset endorsement ( Unlike stocks, which correspond to physical assets), there is no government and legal protection (not protected by law, nor legal tender). So under the situation of three nothings, the strength of this collapse can be imagined.

Why are people scrambling to invest? What is the underlying logic of investment?

You may ask, for these three non-investment projects, why can they still get the belief/investment of so many people? Apart from the theory of decentralization and not wanting to be manipulated by the government or the current financial system, what reason is there for so many people to throw money at it? There must be reasons.

First of all, unlike physical currency, virtual currency has a strong demand for capital flow, and it can be used all over the world without the need to exchange back and forth between countries and banks, let alone paying high currency exchange fees, and secondly, it is extremely volatile. For those who have the idea of ​​getting rich overnight, this is really too tempting, and this huge volatility also means that the probability of being able to make a profit is greatly increased. Furthermore, because they do not want to be supervised, rich people and people with aspirations invest in it one after another. In the eyes of ordinary investors, it is like having an asset endorsement. The last reason, and the most critical reason, is that certain currencies will provide interest as a return, so many long-term investors will imagine this as investing in QQQ/ETF/regular, in order to achieve both financial and interest benefits, the most classic The best example is LUNA currency (LUNA annual interest rate starts at 19%), and this is the underlying logic of most people's investment.

How to invest in virtual currency safely?

Short-term holding, don't be greedy.
Yes, it's that simple. This time the crash is even more dangerous for virtual currencies that are not backed by real assets and may be decoupled at any time.

Summarize

Seeing this, what do you think about investing in virtual currency? You are welcome to leave a message to discuss and discuss. Although I have said so many thoughts that are not conducive to virtual currency, my personal thoughts on investing in virtual currency are still positive. I agree that the development of virtual currency based on blockchain technology will eventually be Bringing a series of revolutions, but for now, virtual currency is still very "virtual", still belongs to the non-mainstream, and cannot bring substantive application in our lives, not to mention that our underlying investment logic has been this time The "big short" change has greatly changed the beliefs of a considerable number of people, so I have reservations about large-scale investment. If you start with the mentality of hoping to understand the cryptocurrency market, you can still invest One percent of the assets are invested, so it is still an old saying that investment needs to be cautious, and planning the money that can be invested is the greatest insurance.

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