Trading vs Investing ... It's Not If Bitcoin Hits 1,000,000, It's When!
Full Disclosure: I do not own bitcoin and have not owned bitcoin for at least a few months...I plan to own some more soon, but right now I am more interested in other projects, let me explain...
Trading is not Investing.
I can draw dozens of lines on charts and tell you what the current price action of the day was doing, but guessing where it will go is a guess, and in the crypto-space as long as you are long and not short...you're making money.
Trading is Random, Investing is Not
Investing follows some pretty standard rules.
- You own a % of something. (SUPPLY)
- That something has power. (DEMAND)
for example: In the case of bitcoin, that power may be sending transactions peer to peer without a central authority via the bitcoin mining network, small power but something nonetheless
But the power (Demand) is just half the equation, the Supply in relation to Demand is incredibly relevant! In fact this part is mostly responsible for the price of assets...
Consider the Following Graph
By Block 1,000,000...With bitcoin inflation under .5% and global exposure to bitcoin increasing by the day, how many Fiat backed Unites States dollar bills do you think one bitcoin will be worth? I know it will be worth more than today.
**Based on the law of Supply and Demand, the pressures on the increasing demand for bitcoin is increasing on a logarithmic scale and as the increasing supply approaches 0% Inflation..., the price of Bitcoin has to explode.
The 1,000,000 block reference point is an arbitrary selection which aims to demonstrate how early in the adoption phase bitcoin is still in. The Bitcoin mining network isnt even at halfway, yet most of the coins are already in circulation. How come the Shills on CNBC Pumping Ripple don't talk about how the laws of supply and demand combined with a dollar with infinite inflation will Moon Bitcoin? Honestly this news network shills Ripple
There are a lot of crypto-projects out there right now, and it's very important to do your homework to make sure you are investing in a reputable group of people.
Additional Tips
- When people appeal to "You deserve it", Nothing in life is easy, when someone tells you it can be easy for you because you deserve it, be skeptical.
see: Bitconnect (BCC) scam
- Check how the early tokens/coins were allocated, this will tell you a lot about how fair the project will be, actions speak louder than words...
Bitcoin featured a fair launch with Nakamoto walking away from the project to live in obscurity.
Ripple has infinite amount of tokens ~[Citation needed but you get my point]~ and pays for CNBC advertisements
Which do you think is more reputable?
When the message is revolution and transformation through a seemingly endless grind which may someday payoff and explode, you're on the right page
An Alternative to Trading Trading Strategies for Investors
Suppose you have a CryptoProject you really believe in
- Bitcoin
- Ethereum
- Steem
- Etc...
What are the best ways to strategically invest in what you believe in?
A way to setup trading strategies to reflect this macro viewpoint of Bitcoin by Block 1,000,000 is to setup alerts, for when Bitcoin reaches a certain price. Only set these alerts when Bitcoin hits a new high rather than lows, because if HODLing is the strategy, it's best not to concern yourself with FUD Events.
Use these alerts to sell slowly on the way up as it is setting new high's
Purchasing your chosen asset in regular intervals based on a responsible amount of your income, so you do not have to sell the assets prematurely to cover expenses.
Schedule times to analyze your portfolio rather than reacting to news, to analyze if your portfolio is reflecting your homework, belief and value system.
Keep researching new projects, as time goes on you may find yourself wanted to reallocate the % of your portfolio, and this is good. Because...
You benefit from the huge gains in a newly growing positive project.
As the project matures it's gains aren't as rapid
You use the gains from the first project to invest in new projects benefiting from the large gains in a newly growing positive project.
The projects I currently believe in: Steem, Augur, and to a lesser extent Ethereum.
I am very excited about the cryptocurrency space and the power of distributed ledger blockchain technology. I believe it has the power to revolutionize the world and bring power to forgotten people and bring the equality humankind deserves.
Thank you and if you have any projects you believe in let me know in the comments below! I look forward to doing a write up on why I believe in the Augur Project. It's the HODLrs Dream Token.