Buy High - Sell Low - Why You Need A Crypto Break
I read somewhere recently that trading crypto produces brain activity similar to gambling. I think there is a big difference between picking a number on a wheel and forecasting the long term future of any asset including cryptocurrency.
Crypto is much different than any other asset class - we don't know if a stock will be around in 100 years - but we know Bitcoin will still be there even if we don't know what function it will ultimately serve. Many "investors" don't realise the fact that there is over 21 trillion dollars sitting in "banana republics" and other tax havens. People are only now starting to realise the potential of Bitcoin in particular. There would be far more money if people could buy it easier - a short term roadblock which is an advantage to long term investors. Bitcoin is domiciled nowhere and is under no regulatory control - that is attractive to people looking for a long term store of private money. Even if 1 trillion of the 21 trillion stored "offshore" was moved - we'd be looking at a really high value coin (they're only making so many of them you know..).
It is very hard to gauge price in the short term - no matter how much of a prognosticator you are - but in the long term it will forever go up because people want it to (the ETF's, options trading and other financial products and beginning to further legitimise that).
In the beginning of my crypto investing (early bitcoin) - I sold at any price - it cost me nothing to mine (in my mind). I found a BTC years later and made $1400 off of it - I didnt need the money but I sold it anyway. This has changed of course as the numbers get bigger and the dips closer together and more frequent. Its always a good time to buy a limited collectable - but how many of us are looking at "cheap" bitcoin today wondering if we've hit the bottom? Even those of us who believe that over the next few years Bitcoin is going to probably hit 100k are probably not "going to the mattresses" to buy more today.
In what may be the greatest socio-economic experiment of all time - patience and fearlessness are essential. If you know where the market is going long term - short term should mean nothing - when we see something plummet - our instincts tell us to run - which is exactly what we shouldn't do.
You can be a trader and a believer - but you can't disbelieve or you better find a new investment vehicle. As a trader i've endured years of terrible markets, taken losses and bought down positions. Bitcoin is different - its forever going up with wild fluctuations on the way there - hang on or don't - but you'll kick yourself for selling at a loss when you could have waited a few weeks for the wind to change directions.
Everyone takes a vacation of some sort from work. We all get burnt out. The same is true of crypto. I think its essential for people to take breaks - shut the news off - do something else. Its not hard to avoid - it doesn't require much of an effort - but it might save you from yourself. History is full of winners and losers - you can only be one or the other.
If you are one of those people who thinks its a good idea to sell an investment you've (hopefully) researched for half of what you paid - today's a good day for you.