The smart Contrarian, Bitcoin (BTC), Diamond coins (DMD) and reasons why BTC is absolutely crushing it!
Bitcoin is absolutely crushing it
As everyone have noticed, as of high noon (GMT) of yesterday 12th of October, Bitcoin (BTC) broke the sound barrier with a sonic boom and left altcoins behind bleeding. This is a followup post from a small piece we read about called "powerful investors vs weak investors vs intelligent investors, Bitcoin (BTC) and Diamond coins (DMD)".
Reason primum
The first and prime reason for this bull run is the upcoming BTC forks and people, having a tendency to think that there is something called a free lunch to be had. For those that are new, if you hold BTC in your BTC wallet (not on an exchange), you will be guaranteed "free" cryptotokens corresponding to how much you were holding at the time of the fork. People are anticipating this and selling altcoins left and right in order to take up a position in BTC, for right or wrong reasons.
Reason secundum
Moving on, reason two for this uptrend is of course the macro (long term) picture; cryptocurrencies are definitely a part of the future of how humans will be doing business. One is through systems of payment. Another, is because investors will always want to park money in a safehaven. Cryptocurrencies with a very limited supply like BTC and Diamond coins (DMD) will most definitely be a storage of value. Anyone holding a rare cryptocurrency with a limited supply will very likely see a sharp rise in said portfolio value.
Reason tertium
BTC and cryptocurrencies are beginning to get adopted in real world applications. We are now at the beginning of an exciting and lifechanging S curve. More and more companies are, and will be implementing cryptocurrencies in their business models.
As always, I asked our community why they thought BTC was going through the roof right now and here was what one of the DMD founders had for an answer:
"I wouldn't be so sure the incoming fork is the only reason of BTC going up the push seems to be too strong - to me it looks like a network effect; more people getting into crypto, I've just recently seen three articles in the mainstream press about BTC with positive opinions in the comments section (unlike before where majority of commentators were trashing crypto, so the change in perception is certainly there). Then the biggest fiat inflow is institutional money, and words from IMF head to take crypto seriously certainly convinced some undecided. (Alex)"
How to capitalize when you understand primum, secundum and tertium
As we know, markets are here to take money from weaker hands and transfer that wealth to stronger hands. Experts are assuming that around 75% of people invest with their feelings and not with their heads. They have a tendency to sell when the numbers are red and buy when the numbers turn green, when it should be the opposite! So what to do? When markets move sharply up or down, have a plan that you have thought out BEFOREHAND that goes hand in hand with buying low and selling high and stick to it. Failure to do so, will make you the victim and transfer your wealth to stronger hands slowly but surely, click after click, deal after deal. When knowing that markets are in the reds, its a clear buy signal if the fundamentals or details for said market has not changed.
A quick example
Look at Diamond coins price graph on bittrex, or any other altcoin of your choice. Do you see a resemblence? Most altcoins are in the reds. Would this be a clear buy signal? Which type of investor would see this as a buying opportunity? Are you a contrarian investor or one of the 75%? This is the main reason for why the wealth distribution of bitcoin will follow that of the real world.
Needless to say, I'm heavily invested in DMD coins so please do your research before drawing your own conclusions.
DrDMD
If you're interested, DMD slack channel and ask for an invite and you will receive an invitation shortly.
There will be definitely lot of people who will make more money by buying Alt coins now than selling alt coins to buy bitcoin.
Let's do quick Math here:
Let's say if I buy 1 Bitcoin = $5600
I might get one token each from Bitcoin Gold and SegWit2x which would worth $1000 combined. Which can be around 20% increase, but prices can keep going up, so there could be huge potential. There are few good alts coins which are way down because of this. If everything sorts out then they will take their spot quickly. Many of these coins are up to 40% down than last few week's price. I would tell everyone that just do what your guts tells you to do. Do your own research and make the decision.
By end of this year
Hi Lykkejay, thanks for your reply! You make a good point. But consider this: Youre assuming that the price of BTC with be the same or higher than your 5600 USD. But what would happen if you sold say 1 BTCs worth of any altcoin (including DMD, mind you, DMD is more resilient because the community is made up of hamsters) to buy a BTC. Lets say you didnt sell too much in the reds at say 10% loss, compared to last week before the market preparing for the fork (you were really lucky with the price) and got your 1 BTC. Suddenly BTC gets banned in country X or Jamie Dimon 2 comes along and talks down the market and BTC goes down 20%-30%. Price falls to 3500, because of altcoins going down 40-50% with BTC you will not get more than say 4-500 USD for both your forks. If you look back at what happend, people sold to stop loss and whales moved in to buy up cheaply, price rised sharply again, you will not be that lucky to get in to your altcoin as fast and have netto loss because of all the FUD. Wealth transfered from weak hands to strong hands, because weak hands thought there is a free lunch to be had. But you might be right! Good luck!
Ive thought about this a bit, what you also have suggested is something called a crowded trade, it means, everyone is doing it and according to the law of supply and demand, you will know how things go when everyone is selling.
If you want me to resteem your post follow the link below
1 UPVOTE = 2 RESTEEM
Great post. But sorry i don't have a lot of steempower, i Will support you with a comment and resteem.
Thanks for reading and commenting!
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Definitely a scam site but hey if you can grab a bit of bitcoin while they are up what da heck right :)
BTC will continue to crush many other crypto coins (old and new). This is the fact so lets just embrace this reality.