Price drop in cryptocurrencies got me all like "meh"
The price has fallen but the technology hasn't changed. I've lost count of the number of reasons as to why the price has fallen:
- Whales cashing out.
- Vitalik's death.
- Hackers.
- Pumpers and dumpers.
- The Chinese.
- SegWit in Bitcoin... and so on.
People love to tell themselves stories about why the price is falling, but really it doesn't matter. There is perhaps some satisfaction in believing a story in order to satisfy curiosity but in too many cases it is meaningless. We are all too easily fooled by randomness.
Taleb sets forth the idea that modern humans are often unaware of the existence of randomness. They tend to explain random outcomes as non-random.
Human beings:
- overestimate causality, e.g., they see elephants in the clouds instead of understanding that they are in fact randomly shaped clouds that appear to our eyes as elephants (or something else);
- tend to view the world as more explainable than it really is. So they look for explanations even when there are none.
https://en.wikipedia.org/wiki/Fooled_by_Randomness
Where to?
When the price of ETH hit $150 (on the way up) I thought it was over-bought. Not long afterwards I remember telling a couple of friends who wanted to get involved at ~$220 that I thought ETH was seriously over-bought. Little did I know that the price would drop to somewhere circa $170 (possibly less) before rocketing up to $400.
If I thought ETH was over-bought at $150 then it should be pretty clear why I'm not fussed about the price today (circa $157).
https://coinmarketcap.com/currencies/ethereum/
And so where to? Probably down. I wouldn't be surprised to see the price cut in half. If the price bounced off $50 before wandering around for a few months or more I really wouldn't be surprised either. I don't expect the price to stay down there forever, of course, but rapid bursts in price always correct sharply. It happened in Bitcoin in 2013 and happened in Gold in 2011. Honestly: chasing peaks will always end in tears.
"Buy low, sell high." - Jim Rogers.
"Be fearful when others are greedy, and be greedy when others are fearful." - Warren Buffett
Disclaimer: this is not investment advice.
Disclaimer: this is my personal opinion and not that of any employer.
This is a relief to read. Really, it's just a young asset class that has a bunch of people clamoring to get in and buying furiously, dumping it, massive ICO's, massive accounts holding ETH, etc. As soon as the USD debt "ceiling" hits, a war starts or the Fed wants to change currencies, the madness will begin again. The exchanges will not be able to sell crypto fast enough. For me, hodl and buy at discount prices.
Upvoted. I agree we have 50% further to go on the down side
But it will all come back
https://steemit.com/bitcoin/@davebrewer/eth-goind-to-usd50-btc-going-to-usd1200-ltc-going-to-usd15-and-steem-back-to-usd0-30
Yeah, let's see! Newer entrants will buy at the peak whenever we are in the midst of pure mania, while the older hands (who ought to know better!) will be waiting for the market to cool down again. Anyone who bought a while back should be sitting comfortably.
Read your post and enjoyed. You are getting a lot of sensible comments too which is great. :-)