I feel strongly that there were a lot of people sitting around over the past eighteen months reading articles about cryptocurrencies. With all the attention and a lot of extra money from numerous government stimulus packages, people had more disposable cash and were sinking that into buying cryptocurrencies like Doge Coin. Now that the stimulus is ending and things are returning to some kind of normal, it is pretty clear that investors are taking money off the table and that is causing more selling than buying, driving prices down.
I don’t see any additional stimulus in the near future and millions of people getting extra unemployment income will surely see that dry up soon. The end result is going to be even lower prices and I really don’t see how the forecasts for some coins can be realistic. The only thing that would start to drive prices higher would be mainstream adoption but even then, with the growing number of coins, the market is a bit crowded. Eventually, whether it is technology or social value, there will have to be some kind of value underpinning the price of a coin or token.
The price of Bitcoin was high in part because of a perceived limited supply. I don’t see how that is a factor considering the ability to buy fractions. Only twenty million coins available, no problem. Just break those up into two trillion coins and that problem is solved. Maybe I’m missing something but it seems pretty ridiculous that the supply limitation is even an issue.
The supply issue could just be a manufactured factor to artificially inflate the price, similar to how the price of houses has skyrocketed because lumber suppliers are claiming a shortage of lumber – driving the price up. Despite hundreds of millions of vaccinations and people returning to work, many suppliers are keeping their prices high and using the pandemic as an excuse.
I don’t have a lot of cryptocurrencies but am definitely not going to buy more within the next 6-12 months. I will just hold my relatively low amount and see what happens. My hold strategy is 5-10 years and I only purchased enough that I could lose it all and not have trouble sleeping.