Why Contrarian Thinking May Save You A LOT of Money and Pain in the Crypto Space

Hey guys! I'm just a 27-year old named Jake who has made some decent money in the crypto market. It has consumed my life and become an obsession for me these past few months (damn you addictive personality!).

I should be working right now but writing about crypto is 10x better, so here I am :)

I wrote this up as a reply to a thread on Reddit and figured I'd post it here since I've spent the time already.

Please don't think I'm trying to create FUD. I am invested in the market quite heavily. I just want to get my thoughts out there and maybe start a discussion, and maybe to get some people to really look into what their investments are with clearer thinking.

I realize what you're about to read isn't stuff you've probably already heard at one point or another, but I feel it's some of the best advice I've gotten from others so I'd like to share it (with some of my own opinions mixed in) so we can all make better decisions.

Basically, what we're seeing right now is EXACTLY what happened during the .com bubble (please google it if you don't know the specifics of how it exactly went down.. many of us were very young), except crypto can rise at an incredibly fast rate due (ironically) to the internet.

There has to come a point where people realize the market caps for all these coins are absurdly high right now.

Ethereum has a higher market cap than Dr. Pepper Snapple Group, 2x higher than Burger King.

ICO's are raising more money than high revenue generating companies SELL FOR, for an IDEA (I realize some of them have working products already, but they are still in the early stages). And most of the money raised comes from huge whale contributors who just quickly dump the coin for profit.

Everything is AT LEAST 10x overvalued (I pull this number out of my ass somewhat. Could be more and could be less and depends on the company. My only backing point being that if these companies tried to sell, I believe most of them wouldn't get 1/10th of their market cap. Mainly because they haven't even proven they are revenue-generating).

If these companies weren't able to get their desired funding from VC's and Angel investors, it should be a sign that they probably don't deserve it from us.

In 3-5 years, myself and many others believe most of these coins won't even exist anymore.

Ameer Rosic is one of my favorite guys in crypto space because he's business minded and level-headed. He says it best when he tells us we are investing in startups, and 95%(give or take) of startups fail.

Add to the fact that these companies are swimming in money already and you have a recipe for them getting complacent or just giving up much easier than say someone who has been grinding for years raising funds and not making any money to make their company succeed.

Maybe I'm underestimating the grit and determination of many of these teams, but who the hell is going to be highly motivated to work when you've received more money in a 1-day (even 5 minute.. LOL) ICO fundraiser than most companies will profit after 5-10 years (if they even survive that long).

Iconomi, ranked #21 in market cap (around $290 million at this time), really isn't even providing anything new. Did you guys know eToro allows you to invest in the top 6 crypto coins right now, and have a crypto fund? I just became aware a couple days ago. And a couple people I talked to who have invested in ICN also did now know.

ICN DREAMS of becoming Etoro, with its only real advantage being that you have a wider selection of coins to choose from. But surely eToro and other sites like it will be adding the most reputable cryptos to their options as they emerge, making ICN's value proposition worse and worse.

Even the part where you can make your own DAA fund isn't new since you can copy other traders already on eToro.
I personally thought Iconomi was going to be the first fiat gateway to attract "normal" people into crypto, but it's becoming obvious to me that they are fighting a real uphill battle in a space that's already saturated with big competitors. Soon enough, all established trading platforms are going to allow you to invest in crypto funds.

Kind of went off on a rant on ICN there (no hate or agenda against them), but my point is that I think we all (myself included) aren't doing enough due diligence to see what exactly these companies are bringing to the table that warrants such high levels of investment.

Something seriously isn't right, and this is going to come down HARD on a lot of peoples' heads. We can only hope we are still the early ones and that we can get out in time before the inevitable pop.

Many say this isn't a bubble quite yet because there hasn't been mainstream adoption, but 10x to market cap in (roughly) 6 months is bubble-worthy.

Mainstream adoption - another point to discuss. Mainstream adoption is really in the hands of the fund managers who have control over all the general public's money. Do you think they are going to get in near the peak of a huge parabolic rise? Or do you think they would rather wait it out for a good entry point?

Even individual mainstream investors (who would account for such a small % of market cap in the long-term) are at the point where they feel like they've missed the boat. Most of them are waiting for a better entry point as well.

I personally think we see a big correction first down to 30-40 billion total mkt cap before we see the next wave of money coming in. (but let's not make this post about personal views of where the market will end up in cap)

Usually bubbles take years to pop, but we all know how fast-paced and wild crypto is... These past 7-8 months could certainly be entire bubble that's now in the process of popping.

A lot of us have already made a TON of money, but it's clear that many are also going to lose a ton... at some point.
Most are blind to it right now because you could basically open any order book, buy a coin and profit. Seems too easy... can't lose, no risk mentality.

We've seen some good news the past few days about institutional money considering investing in crypto assets, but it seems they aren't jumping in just yet, and even recommending it to their clients at this point would be ill-advised since it has risen so much and seems due for a correction.

I guess my entire message for this rant is this... Think with a level head instead of a get-rich-quick mindset. Think critically about what is happening, and think contrarian-like a little bit. There's a massive weight towards optimism over pessimism in crypto.

Think about why the optimists might be wrong before you come to your own decision because hint: Most optimists really haven't even thought for themselves... they're just repeating what everyone else has told them, and most in this space have a very surface-level understanding of the tech they invest in (and they usually only perform that research after they've invested in the latest hypecoin, so when they DO look at the tech, they become extremely biased towards it being the next big thing, just so they can reinforce their impulsive buying decision)