stablecoins

The Stages of a Market Mania

What is a mania? It is defined as a mental illness characterized by great excitement, euphoria, delusions and overactivity. In investing, this results in investment decisions being driven by fear and greed without being tempered with analysis, reason or balance of risk and reward outcomes. The mania is generally running parallel with the company development of the product, but timing can occasionally run askew.

The Idea Stage

The first stage of a mania begins with a good idea. The theory is as yet not known to many people yet, but the prospect of profits are huge. This really is usually translated as unlimited profit, since "something such as it has never been done before ".The web was one such case. People using the paper systems of that time period were skeptical as "just how can the web replace this kind of familiar and entrenched system?" The backbone of the theory begins to have built. This translated into the modems, servers, software, and websites needed to have the theory into something tangible. Investments in the theory stage begin lackluster and made by people "in the know ".In the case, it could be the visionaries and people focusing on the project.

 The Possibilities

The first websites were crude, limited, slow and annoying. The skeptics would look at the words "information superhighway" that the visionaries were spouting and saying "just how can this really be that useful?" The forgotten element here's that ideas begin at their worst, and then evolve into something better and better. This sometimes happens due to raised technology, more scale, and cheaper costs, better applications for the product under consideration, or even more understanding of the product combined with great marketing. On the investment side, early adopters are getting in, but there is no euphoria and astronomical returns yet. In some instances, investments have made decent returns, but insufficient to sway the masses into jumping in. This really is analogous to the slow internet connections of the 1990s, websites crashing or information being incorrect on search engines. In the cryptocurrency world, it is being witnessed by high mining costs for stablecoins, slow transaction times and hacking or theft of accounts.

      

The Acceleration

Word starts to have out that internet and ".com" is the hot new thing. The products and tangibility is being constructed, but because of the massive scale involved, the cost and time expended would be massive before many people are using it. The investment part of the equation starts to have prior to the business development since markets discount the potential of a company with the price of the investment. The euphoria is just starting to materialize, but only among early adopters. This really is happening in the cryptocurrency world with the explosion of new "altcoins", and the large media press that the room is getting.

The Crash and Burn

The business enterprise scene for the newest product is changing, however, not nearly as quickly as the investment scene is changing. Eventually, a move in mindset appears and a massive selling spree begins. Volatility is massive, and many "weak hands" and wiped out of the market. Suddenly, analysis is being used again to justify that these companies haven't any value or are "overvalued ".Worries spreads and prices accelerate downward. Companies who do not need earnings and who are surviving on hype and future prospects are blown out. The incidents of fraud and scams increasing to make the most of the greed are exposed, causing more fear and selling from securities. The businesses who have the amount of money are quietly buying the newest product, but the rate of progress slows down because the newest product is "an ugly word" unless the profits are demonstrated convincingly. This really is starting to occur in the cryptocurrency world with the folding of lending schemes using cryptocurrencies and higher incidents of the theft of coins. A few of the marginal coins are crashing in value because of their speculative nature.

The Survivors

In this stage, the investment landscape is charred with stories of losses and bad experiences. Meanwhile, the fantastic idea is getting into tangibility and for businesses that utilize it, it is really a boom. It starts becoming implemented in everyday activities. The merchandise starts to become the conventional and the visionaries are quoted in saying that "the data superhighway" is real. The average user notices an improvement in the product and it starts mass adoption. The businesses who had a genuine profit strategy have a hit throughout the crash and burn stage, but if they've the money to survive, they ensure it is to the next wave. It has not happened in the cryptocurrency world at the time of yet. The expected survivors are those who have a real business case and corporate backing - nonetheless it remains to be viewed which companies and coins these will be.