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Lost Ark Gold Inflation & Deflation Guide: How To Make Gold Profit from Market Crash?
5/17/2022 6:49:32 AM
In this Lost Ark Market Trading guide from Vwhy, we go over why the gold inflation and deflation happen and how to make a profit out of the gold inflation in the market crash.
What is Gold Inflation in Lost Ark?
Gold inflation in Lost Ark is a period where there is too much Lost Ark gold leading to a gold devaluation, so let's just take the example of us dollar to better understand this:
As you can see from the 1960s the amount of the U.S dollar has been going up by a substantial amount, there was a lot of printing of new money and so the amount of the US dollar has been going up over time. With the u.s dollar's value has been decreasing, so basically, the purchasing power of the US dollar has been decreasing as well over time. That's basically very simple to understand you just take for example a glass of whiskey, and then you just keep pouring or adding in water uh at the end the whiskey is not going to taste less weak like risky at the end, it's going to just taste like tastes like water.
So it's basically the same for gold as well, the more gold you have on the server or on the region, the last value it will have over time.
1) Creation of Gold (Supply)
Gold is mostly created, it is different than earn by clearing content for example T3 Abyssal dungeons like Argos, or Adventure Island reward with gold as well, so one character or Alt at 1370 can create up to 2900 gold (900+1200+800) every week and so that's basically from the harmony of Abyssal dungeons and Phase 1 of Argos. So let's say there are like 10000 characters at 1370 that will that would be a total of 29 million gold created every week and that just from the Alts and characters like that. Over time those alts are going to reach higher gear scores and they're going to be able to reach Argo's phase 3, so they're going to generate even more gold than these 29 million. So as you can see, this is the graph of the gold creation over time, so this number is going to always increase more and more.
But with that, the gold purchasing power or the gold value is going to go down over time, this is more like an unstable graph - over time this is going down, but sometimes the gold value goes up because we have some market crashes and stuff like that. So you know sometimes it goes up but the overall graph is going down.
2) Consumption of Gold (Apply)
Gold can be burnt and in fact, Honing clicks is where most of the gold is burned or if you wish evaporated. But, generally speaking, most F2P does not hone Alts as much as their man (aka Alts parking)
60% of most players actually burn their gold for honing so that they can basically control the inflation by a little but you know that's not gonna be the case. Generally speaking, most free-to-play players do not hone their alts as much as their main, if you parked or your alt let's say 1370, you're going to pre-park your alt there for a pretty decent amount of time, and then whenever you have, you know a decent amount of or too much gold then you're going to try to hone that alts, but you're going to focus more on your main especially if your main didn't reach 1415 yet.
So your main character earns gold either from our goals or mod of Abyssal dungeons and stuff, and the percentage of that gold earned is going to be spent on the new mains characters holding, but instead from your parked alts that alt is going to also earn gold but there is no really spending on that that gold. You're not going to really spend that gold into honing your alts, so that gold is going to be kept and remain in the system until it will be spent, and so whenever that gold is spent by most players that leads to inflation or the rising price of materials and stuff like that on the open market because that's basically the time where people actually flex their gold.
3) Change of Trading Behaviour in Lost Ark Market
Usually F2P is on the Supply side of the market and P2W is on the Demand Side, which creates a kind of stable market. F2P sells and P2W buys, but F2P behavior changes from time to time in 2 different scenarios in Lost Ark Market:
1. Stop selling their tradable materials and instead use them for honing
F2P stop selling their tradable materials and instead use them for honey, which reduces the supply of the particular item in the open market because they just ask themselves "is it really worth it for me to sell this material?" and they want instead to use that item so they can reach let's say 1415, so they can access Valtan normal mode.
2. A portion of F2P players starts to be on the Demand side of the market (1370 Argos,1415 Valtan, etc.). On top of that, more P2W players are likely to buy Gold to spend it (Ex: Glavier)
That happened at Argos whenever there were a lot of people who didn't reach that gear score and then they didn't actually sell the materials that they gathered, but instead, they will not only use that tradable material but also they are buying from the open market because they want to reach 1370 as fast as possible. So on top of that, you also have more and more P2W players who are likely to buy gold to spend it on the open market.
How To Make Gold Profit From Market Crash (Inflation Period) in Lost Ark?
Following the below tips, you will surely make a good investment for during gold inflation and deflation and earn great profit from the market crash in Lost Ark:
1. Identify Market Volatility - Best Time To Buy & Sell
The market always has Ups and Downs, just like the wave in the ocean right. So let's call that a market crash right, there are two different types of volatility:
1) Short Term: On a weekly basis (Ex: Shards are more Expensive on Wednesday)
2) Long Term: On Monthly+ Basis (New content, New Class, Ex: Valtan)
Study Market Trend To Identify The Best Time To Buy & Sell
Volatility is very important because that's the way you make profit right. If you don't have volatility let's say this is a straight line, you can't really make profit because you cannot buy low and sell high. But to make gold from the market crash, you have to study the market volatility and identify the following 3 factors:
Identify The Prices Trend: Whenever you know the price trend, this is very important you have to identify the price trend when it's going up and when it's going down, so identifying the price trend is very important.
Identify The Player's Sentiment: Also the player's sentiment is also very important, for example, you have to know: for the Valtan release, if people are going to focus on either having as many 1415 characters as possible or are they going to focus to push their main to 1450 because there is less player at 14 15 right on their main, so you have to really also identify what is the overall player's sentiment.
Identify The Upcoming Catalyst: Also you have to identify what is the upcoming catalyst, if you know what is to come, you can prevent in advance what is going to increase in price and stuff like that, so this was a very important factor in how you going to be able to make profit.
2. Hedging (Protect Your Gold Value) - Best Items To Buy During Inflation
Hedging is basically how to protect the value of your gold:
1) Inflation -> Gold Value Down -> Spending Gold During Inflation -> Lose Profit
Because during inflation, the gold value goes down and if you spend your gold basically during the time when you're gold have less value, you're actually making a loss. And that doesn't include honing because obviously you need to hone. So you don't want to hold/spend too much gold during an inflation.
2) Buy During Market Crash (Deflation), Sell During Inflation
It's very bad to spend your gold during the inflation because you want to have as much gold as possible so that when the market goes to a deflation phase or market crash if you want that's where you want to buy as many items as you can so that you can sell them after when there is another inflation right because the market is a wave, remember there is always ups and downs and you want to buy it when it goes down.
So the best way to hedge against gold inflation is to buy undervalued items (an item that is low in price at the moment but has a fundamental value in the future, for example Honor shards).
3. Do Not Follow What The Majority Does - Buy When Most People Sell, Sell When Most People Buy
When most people sell you want to buy and when most people buy you want to sell. You shouldn't hold or buy any yolo items, you need to have a fundamental value on the item to apply this rule. So this is your golden rule for making profit on the open market.
The overall sentiment of the moment is you should sell everything now because it's going to go in one go, so that's when most people sell you want to buy, or at least you don't want to sell, you don't really necessarily have to buy but you just don't want to sell at when everyone is selling panic, that's really important to identify this, do not really follow the mail of what majority of people does and you need to have a fundamental value on why you need to sell right now or why you need to buy right now.
4. Emotions - Maintain the Right Investment Mindset
Emotions are the biggest factor that can mess you up or that you can fail in trading:
1) Avoid Greed
Remember we trade to make profit not because we love that item. Therefore do not hesitate to take profit when you can it's never a loss to sell for a profit.
2) Fear of Missing Out
Do not buy something just because you see the price rising. You're already late for the party, move on and plan your next move.
3) Yolo
Do not invest without any evidence of Value for that item. Do some research, see what is the overall sentiment of player base, what is to come, are people focusing on their alts or main, etc.
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