What if Bitcoin and Cyrptocurrency Volatility Take a Vacation
Over the years I've subscribed to a number of different investment philosophies and strategies. And the one consistency I've maintained is the periodic evaluation of my assets and goals. And of course, this now includes Bitcoin and other Cryptocurrencies. Now, for full disclosure, I'm not an investment advisor, CPA or attorney. Nothing in the post should be considered investment advice. You must make your own decisions on what is right for you.
Some conventional wisdom proposes you should move out of equities in the summer and into fixed income. And, then back to equities in the fall. I've sometimes followed this with good success. But while evaluating my portfolio this year it occurred to me that Bitcoin and cryptocurrencies don't really have a stable track record to fall back on, so looking for stability during the off months did not make sense. Bottom line, is there a good and bad time to invest or hold Bitcoin or cryptocurrency? No one really knows.
Then comes the question, why invest in Bitcoin and cryptocurrencies right now. Is it just for the fabulous anticipated run-up? Or, is it something else. But, and let's be realistic if the run-up does not come or is years away, are we still making the right decision. We can answer that question by asking, are we basing our decisions on solid business use cases.
The point here is that if we are only speculating for the sake of speculating, we may be in for a long wait. If on the other hand, we are investing in business ventures that have or will have value in the market, we may be happier with our investment in both the short and long term.
One of the best business use cases out there is social interaction and Steemit shines in this space. I recently posted Cryptocurrency Adoption showing Steemit ranked number one. It has since slipped to number two with Drug Wars, another Steem product, claiming the number one spot. According to State of the Dapps, Steem is holding its own thank you very much.
But there is really much more to the Bitcoin and cryptocurrency space than coins and tokens. In fact, someday we may see coins and tokens as just the tip of the iceberg. The true enormity of the market may be seen in the blockchain technologies that permeate many industries.
Major corporations, from automakers to banks and many other industries are locking up business use cases through patents. I alluded to this in Powering Up the Blockchain but did not really do it justice. This truly is the wave of the future. And there are so many ways to get involved, including but not limited to various stock markets.
So what is the purpose of this post? Really it comes back to my favorite topic, adoption. When prices soar, and the potential to make a bundle overnight, there is a rush to get a piece of the pie, i.e. FOMO. But, when volatility slows down and FOMO is not top of mind, adoption grinds down. Similar to where we are right now. To be sure, there will be ups and down in the market, but we may not see any major moves for a while.
But, based on selecting a solid business use case, social engagement, we may be able to see continued growth, albeit at a moderate pace. And in my mind, that is not a bad thing. Creating a solid user foundation will be crucial in the future. Building market share and maintaining growth is critical to future success.
Now, back to the start of the post. This year I'm planning on applying some of that conventional wisdom I spoke of to companies invested in blockchain technologies. Kinda hedging my investment between tried and true and companies utilizing blockchain technologies. I'll provide an update on my results.
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Dear @guysellars I found this publication courtesy of my friend @crypto.piotr
The experience that we obtain when trying different variants make you discard unprofitable investments and they leave you a good learning that can be useful when advising others, even if you do not consider yourself an adviser, for new investors perhaps some tips product of the lived experience they serve always to help someone.
It is true that the cryptocurrencies have not reached their maximum historical prices and I have no idea that this is due, but if we review their behavior lately we will find that there are no such sudden drops, I think that is something of stability or is the beginning of a stable environment for the future.
Fondly
Pr EV
Hi @fucho80. Thank you for dropping by. Absolutely correct, experience is a great teacher, if we listen.
As for your statement:
This is a good call out. It does seem to be stable at the moment, which is a good thing. But in my mind there is not enough maturity in this space to try and make an educated guess. Could go either way. So my choice is to try and prepare for any direction. Hopefully the strategy will work. Time will tell.
Hope to see you around again.
Hey @guysellars thanks for sharing your ideas about cryptocurrency.
I must say that the investments I made in my crypto portfolio mostly were based in some analysis, adoption possibilities etc. There are also coins I invested in because of hypes.
Still I cannot build a correlation between how good and promising a token is and the current market value. I see a lot of shitty coins, with quite amateur teams behind it, pumping & dumping the coin, having quite high values. But also very solid tokens, very promising, continuous development occuring coins with not very high values.
It is a very strange market, containing a lot of risks.
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Hi @lion200. I appreciate you dropping by. And, to your point, I think we've all made some bad crypto investments. Personally I did not stop investing in ICO's soon enough. But live and learn.
My focus here was to try and shift off of coin and token and onto blockchain technology. Since the blockchain technology has been adopted more readily by the corporate world as evidenced by the number of patents flooding the market, traditional investments such as the stock market or even direct investment in companies seems very feasible. Now true in most cases it is not a pure blockchain play, you also have the benefit of the companies normal business model. But I see that as a plus, especially if we do not return to the volatility as quickly as so many have speculated. I'm looking for long term investment regardless.
One last thing, you mentioned pump and dumps which are illegal in conventional markets, but I don't believe the laws have caught up to coins and tokens yet. Meaning we are in the wild wild west and anything goes, for the most part.
Again, thanks for dropping by, hope to see you again.
That makes 2 of us then :)
I understand, but making the difference is not so easy for the outside world at the moment. Maybe in some time people will realize blockchain is not all about coins and tokens.
Indeed we are, hopefully in time we see a more stabilized market. The question is when and at which value it will reach this stabilization :)
You are very welcome. We will see each other often I think. Interesting post! Thanks again!
Hi dear @guysellars.
I thought it was great how you approached this important topic giving it a touch of freshness.
Even though you clarified that you are not a financial advisor, you gave me some investment ideas. Thank you.
I loved this phrase.
Dear @guysellars
As my grandfather used to say, money money has a life of its own and behaves like a human being.
Then I asked him why you say that.
Told me the money was invented by people as their own benefit so their management will be by people and people have their ups and downs depending on how they feel they buy things to feel good, the investments are the same are handled by people who study the behavior of them. Therefore if someone sells a lot others follow them and if someone buys a lot like others will follow him and that behavior will always be given by people, that is why I say that every financial entity behind that there are humans manipulating economic behavior.
That is why money has a life of its own and if it is not invested, it can not be made a fair profit.
The detail is how, when, where and with whom it is invested, those are the factors outside of us.
I think particularly that they ne
Hello @lanzjoseg. Sounds like your grandfather was a very wise man. You've brought up a great point. By nature, many are followers. Sellers have followers and buyers have followers. And, depending on your inclination at that moment, you could be in either camp. It is also why money seems to have a life of its own, because at any given time one group may be larger than the other. I think that is what gave rise to the bulls and bears.
Thank you so much for contributing @lanzjoseg. I hope to see you again.
Very @guysellars nice reading because it is good to interact with different points of view where we can clarify and reach a single conclusion.
Man in his greatness and his little ones at the same time.
Dear @guysellars
It's me again. If you like I can show you how to send mass memos and I can provide you with list of all your followers which I consider valuable and supportive.
So you could send them memo and invite to your publication. Think about it and let me know.
ps.
This part attracted my attention:
Could you please tell me more about your ideas? Is your current work somehow related to blockchain? I remember you mentioned that you're in finance industry.
Just curious :)
Cheers
Piotr
Hi @crypto.piotr. I would very much like to learn how to create mass memos. And a list of valuable supporters would be fantastic. I truly appreciate the offer and look forward to the information.
As far as your second question regarding conventional wisdom, it is really two part. But first, I am not a professional investment adviser and this is not investment advice. Everyone must make there own decision as to what is best for them.
Ok, so the first part is that I tend to follow cycles and trends. Stock Traders Almanac is one service where you can learn a lot about tried and true stock market cycles. What is the best periods of the year to what is the best day. There is a lot of good information on their site and in their reasonably priced almanac which comes out in October. But I just bought a copy for my daughter-in-law because the information is always valuable. FYI, the link above is not an affiliate link, so I make nothing if you click it.
The second part of this is that I've been watching a number of US companies jumping into blockchain technologies. My intent is to apply what I've learned about cycles to these forward thinking companies and see how I do this year. I don't believe that this is revolutionary and to be honest I'm already following several of the companies for other reasons. But I believe this will give me an edge this year and keep me focused on the blockchain space long term.
Sorry if this is not a bombshell, but I like slow and study and the above seems to work with my personality. That said, I've actively day traded in the past and may do so again in the future. Hope this helps. Best of luck in your investing or trading.
We always tend to evaluate cryptocurrencies and tokens, their behavior, their ups and downs and obviously the market conditions when we need to invest in this type of item. But I think your point of view is interesting. The blockchain is a technology that is evolving and it is its utility or use that will determine its value.
I guess that just like a long time ago, those who invested in projects such as Facebook or YouTube, which nobody knew, nowadays must be millionaires. So I think it's a good idea to study the companies and projects which are working or developing on blockchain technology and invest in those that have more utility in the future.
Hi @jadams2k18. Thank you for dropping by. Agree, Facebook, Youtube and others were un-proven at first, yet the founders are now millionaires.
In this case, I think that the mainstream companies are doing the adopting and heavy lifting by exploring new business cases. Some of these companies have very well known names.
Hope to see you around more @jadams2k18. Thanks again for contributing to the post.
Canadian Ontario Town Accepts Property Taxes in Bitcoin. There’s a Catch.
https://www.ccn.com/ontario-town-accepts-property-taxes-bitcoin-catch
Hi @sinushacker. Thanks for dropping by.