RE: Calm Down! A Few Thoughts about Investing and the Ups and Downs of the Cryptocurrency Markets
YES!!! This is what so many people don't understand. Even in the 'traditional' stock market - I forget the exact statistic - but even the best professional day traders only beat the market (S&P) 20% of the time - and that's collectively, not as individuals.
Your 'tone' here reminds me very much of J L Collins on his stock series website, or sort of Boggglehead-esque theories applied to crypto (ok inherent contradiction - as both would most likely advise against crypto - but you know what I mean). Like you said, unless you're an expert with niche knowledge, market timing is a losing proposition for the majority of us (that doesn't even factor in the logistics of frequent exchange crashes, and lack of stability when converting gains from one alt coin to BTC then back to the dollar)
Looking at the limited data we have on the 'established' (relative term) cryptos - they have mostly gone up over time (like the S&P, VSTAX, etc). Sure there have been wild dips and losses - if one invested in VSTAX in 2008, their portfolio would have lost 1/2 its value...if they panicked and sold, they would have locked in losses...however the holders recovered within 2-3 years as long as they didn't touch the principal. A similar comparison can be made with BTC...the bitcoinira website actually has great charts for theoretical BTC investments made over the last couple of years.
Anyone who 'invests' in crypto couldn't go wrong by reading up on traditional investing strategies (of the long term versions). Eventually - that's what crypto trading will become - I think their future trajectory is more like stocks than as currencies.
Thanks, and well said!
One of the things I bump into is that this is a whole new paradigm. I talk to people through email and messages and suddenly we live in this world were "long term" is a month or two... and people look at me in complete befuddlement when I say "Errrmmm.... I was thinking more like five YEARS."
Maybe our world is moving so fast now that a five year time horizon has become nonsense. Still, one of the things I said very early on when I first came to Steemit was that I would give it six months to see if it was scammy (it turned out not to be... mostly) and otherwise I was going to park my content here for five years, of which this is barely year one.
The time warp is mind blowing! I certainly hope that in five years Steemit is still around, a bit more user friendly, and certain snags have been cut out...but 5 years is an eternity in cyberland. I remember thinking MySpace was everything...how long did it last (in its original incarnation)...wasn't it about 5 years?
Hey Steemit Gods - don't let this become the myspace of crypto :-P
(and congrats on 1 year!!! - sorry for the stingy upvote, been going a little crazy and need to recharge a bit)
I happened to have similar thoughts and treat them more like stocks as well. The more main stream cryptocurrency becomes the more “normal” money is put in. Resulting in that money having to follow normal business patterns and hopefully a better rational thought of trading.
Yup. The ride will be less wild by then - the days of 1000% overnight gains long gone, but by that point using the technology should be smoother - and yes, some 'normality' could be a very good thing !
(I can't deny I do get a bit of a gambler's high watching XRP go from $.009 to over a dollar...but also that low when crypto I'm in plummets, even temporarily lol...it would be nice to know the long term trajectory, and that my crypto is as 'safe' sitting on an exchange as my IRA is with Vanguard.)
Many years ago when i was into forex. I was looking thought all the currency pairs that where available on the platform I was using for over the counter trading. All the way at the bottom I noticed this one pair that had just massive drops. It was the Zimbabwean dollar at the time. I was just a stupid kid. Had no idea what hyperinflation was. Thankfully I didn’t take the gamble because I would lost my shirt and then some. I check in on it every day just not understanding how it could be taking such a massive dump day after day.