The Holder's Myth

Last fall, when the cryptocurrency markets were booming with optimism and people were buying into the speculator's hype, I remember listening regularly to perhaps Kanye West's best album My Big Twisted Dark Fantasy. The song that comes to mind is Dark Fantasy which opens the album. Although the rap itself is top notch, my favorite part of the song has always been the chorus asking:

"Can we get much higher?"

So, now that we're in a bear market and things are falling apart. Let's ask the question again: Can we get much higher? Or are we buying into some BS?

In Pursuit of Spectacular Fantasies

What is the holder's myth? The idea that at some point in the future the price of an asset will be higher than it is now. Certainly we can show that this isn't true for all assets. Holding Blockbuster isn't going to make you a millionaire in 10 years despite the fact that it is super cheap right now.

Now I am not going to sit around and praise people that sell for a loss. But at some point, given any asset, there reaches a point of no return where there is no redemption in store for the price. Sure, cryptocurrency has a future, but only a subset which currently exists. Hell, the technology that actually changes the world might not even exist yet.

People may criticize fear, uncertainty, and doubt, but the last two are healthy investing mindsets to consider. Because when dealing which the future, we're dealing with probability. And when dealing with probability is it rational to consider uncertainty and to doubt the validity of certain hypothesizes laid out by different investors looking to make money.

You shouldn't buy in the holder's myth 100%. That type of attitude leaves you susceptible to catastrophic failure. I'm not 100% invested in cryptocurrency because that would be incredibility short-sided and inconsiderate of risk. I might not get the biggest gains, but I don't get blown up as I might be if I was too attached to certain positions and ideas.

There are also different variants and ideas that spring from the holder's myth. There are people that like to stockpile assets in the belief that they will have a bigger stake in a brighter future. But while they will certainly have a bigger stake, the future doesn't necessarily have to be bright. There are so many factors that come into effect in the valuation of assets and just because the technology is exciting doesn't make growing one's position a sure thing.

All it takes is that technology to be replaced by something a little bit better in a small way. Facebook wasn't the first social media network. It just was better at the key moment it needed to be. Most of the other networks of that era have slowly faded away into obscurity. A holder of one of those networks at its peak will probably never see their fantasy come true.

But to wrap this idea up, I revisit the money-centrists, those folks that obsess over short-term ROI and growing that fast cash. The money-centrists on Steem that focus on ROI seem to also assume the holder's myth. They apparently can not conceive of the possibility that their actions could drive the price downwards indefinitely. While their coins increase, the overall value that they build may not necessarily do the same.

The ROI of a social credit is completely irrelevant if the social credit is worthless. And at the current moment I view Steem somewhere on the spectrum of internet money and Reddit karma, where it has been slowly drifting towards karma on that spectrum.
It leaves me at the moment asking even at these prices:

"Can we get much higher?"

Who knows? I know I don't.