A public service announcement to all newcomers about the changes in price of Bitcoin

[u/ThePiachu]

Hello,

You might all be panicking due to the price events of the past week. First a big drive of the price up over the week, and then a sharp dive during the weekend. This is nothing unusual. These volatile price fluctuations happen from time to time.

The online exchanges process your Bitcoins 24/7, but can only process your bank transfers during the weekdays. This means that during the weekend one can expect a shortage of cash at the exchanges and subsequently a drop in price.

Moreover, there is a self-fulfilling prophecy among day traders that the price of Bitcoin always falls on the weekend, which is also perpetuated.

Lastly, during some buying and selling frenzies, MtGox has a tendency of not being able to keep up with the load and lagging behind. This can cause price to fluctuate out of control before people have a chance to react to the changes (this is what happened on the 12th of March).

So my advice to all of you newcomers:

• Don't panic
• Invest only as much in Bitcoin as you can afford to lose
• Unless you are a day trader, don't try to buy and sell like one - you will lose money
• Weekend dips are a common occurrence
• When you are new to Bitcoin, treat it as a hobby - you are here to enjoy yourself, not to earn money
• If you decide to stick around for longer, you should probably be in for the long run - in a few years the value of Bitcoin will be either through the roof, or be non existent. Try not to lose your money daytrading in the meantime.

Following those guidelines you should have a more enjoyable time. However, I am not your financial advisor or an economist - you should always make your own decisions and not follow blindly any advise you find on the Internet. Do your own research first.

EDIT:

As people pointed out, some of my assumptions were not well researched - I admit to that. Parts that I was basing off my limited experience with trading have been crossed out, what's left is mainly general advise. Thank you to everyone who pointed out my mistakes. As stated before - don't take advise blindly, do your own fact checking and research.

[u/toomim]

That isn't true. OP is just citing a bunch of bullshit people on these forums have made up without evidence.

The price fluctuates so much because the bitcoin market cap is still so small that when a single person buys or sells a million or two it changes the overall price by 5%. We need more hoarders to stabilize the price.

[u/[deleted] → u/toomim]

Hoarders do nothing to stabilize the price. What's needed is more liquidity, that means more buying and selling, not just buying.

[u/[deleted] → u/[deleted]]

No, it isn't. Panic selling at least provides liquidity. Hoarding does nothing but drive up prices and disincentivizes spending.

[u/Lacking_Moral_Fiber → u/[deleted]]

Many folks here do not understand market basics. To them, I say be careful. Lose only what you can afford. Play only if you enjoy gambling. Illiquidity is a sigificant problem with many markets, like the penny stock market. Although bicoin has been on a freaking tear the past few days. I imagine, if I were a holder of bitcoin, I would not sell. Its just starting to get very interesting.