Among the myths around cryptos, there is that of becoming a millionaire one day by trading. The subject was discussed this Friday during a round table at Surfin’ Bitcoin.
The tone is set. “Why do newcomers think of making a fortune immediately in cryptocurrencies?” asks Grégory Raymond, co-founder of the media The Big Whale, at the beginning of the round table entitled “The trap of trading and the fantasy of 1000%”. The conference, which brought together four experts in the field, was held this Friday morning at the Surfin’ Bitcoin which brings together 1,800 participants from Thursday to Saturday in Biarritz.
If we look at the cryptocurrency market, its high volatility, up (bull market) or down (bear market, as we saw with the two recent crypto-crashes), can attract more than one. The facts are there: according to data from Coinmarketcap, some cryptocurrencies have seen their prices explode in the space of a short time or even over the longer term.
For example, it is certain that those who bought bitcoin as soon as it was released – when it was only worth a few dollars – and who still hold it today, were able to earn a lot of money, others have even managed to become millionaires. At the time of writing, Bitcoin’s price is trading around $21,000 even though it hit an all-time high of $69,000 last November.
“Easy money does not exist”
“Yes, there is the famous ‘ah I know someone who has won a lot’. However, in my opinion, easy money does not exist. Besides, we are entering a complicated period, it does not there is no forecast for the future and therefore there are people who try their hand at something else. We were locked up during the confinements and we had time to discover the whole ecosystem”, declared Owen Simonin, boss of the company Just Mining, also known as “Hasheur”.
The ecosystem of cryptocurrencies interests more and more French people. According to a recent study by the association for the development of digital assets (ADAN), 8% of French people have invested in cryptocurrencies in 2021 and 30% plan to invest in these assets in 2022. Some traders hope to increase their chance of winning money with certain processes, in particular with the leverage effect.
“We’ve had waves of new products with significant returns for 20 years. But one thing is certain, it’s riskier to trade cryptocurrencies than other products. The more risk you take, the more potential return you have. high”, explains Nicolas Chéron, market strategist at ZoneBourse.
The speakers recalled that in the cryptocurrency market, you should only invest part of your capital (10 to 15%) and diversify your portfolio. As a reminder, it is advisable to invest only what you are ready to lose. The leverage effect in cryptocurrencies therefore remains to be taken with caution.
“I got screwed with the leverage”
“Avoid leverage, it’s really a trap, it takes a lot of experience, I’ve been fooled with leverage,” admits the trader Dark emi, who by doing a freehand survey showed that many other people in the room have lost money with this process.
Because there is a big difference between traders in traditional finance and the crypto ecosystem.
“People who get into cryptocurrency trading are much less educated than in traditional finance trading, but education is an essential part of this ecosystem,” says Owen Simonin.
For those interested in trading, the facts are there: whether in the stock market or in the cryptocurrency market, there are many more losers than winners even if social networks can highlight the successes more. In chess.
“People who are new to cryptocurrency are going to make a little bit, then after bear or bull market waves, 99% lose at the end and 1% will win,” says Rogzy, CEO of Discover Bitcoin.
This trend is not only illustrated on the cryptocurrency market, it is also the case on the classic stock market.
“I am a stock market analyst, I speak with a lot of clients and I must know only about ten or even twenty traders who earn their living by trading”, admits Nicolas Chéron.
So if there is still so much loss in trading, why does this area remain so attractive? Many factors can be mentioned: the financial freedom allowed by cryptocurrencies, the (psychological) sensations that traders can experience when buying or selling their assets. But one subject was unanimous: that of learning both the workings of the financial system and the crypto ecosystem.
“Even the best have lost money, even the banks have lost money. The more I dig into the job of trader, the more I tell myself that it’s a full-time job. You have to take the time to understand well, but it requires a huge learning curve”, concludes Owen Simonin.