Buy when there’s blood in the streets.
Rothschild said it, and did it.
Buffet is another one who believes in contrarian investing.
Others like Marty Whitman and John Templeton also made fortunes subscribing to this approach as this Investopedia article tells us.
It also talks about the risks, but they are greatly reduced if you’re buying a diversified quality basket. 😎
Read the "The Dos and Don’ts" here if you're not aware of my rules.
Eventhoug I’m not a big fan of Warren Buffet, he is right about that. I believe he says the same about buying. “Buy when everyone sells and sell when everyone is buying”. Market is dropping and it feels like it wants to go event lower. Some call for as low as 3000 which may sound really scary. It also sounds very improbable. Just recently I saw post where I could see how much mining of bitcoin costs in each country. In US you can mine bitcoin for just around today’s price. In South Korea (that really surprised me) it costs 26000 (twenty six thousand per bitcoin!), in just a few countries it’s little below 2000. Overall average is close to 7000. That’s lower than today’s price of bitcoin. What do you think happens if miners were forced to stop mining? If we get to 5000 most of them will go out of business. Of course there could be a flash crash forcing everyone to panic. But if we get to 3000, I can guarantee you, it won’t be for too long. I’m ready for any scenario. As of now, our only weapon is patience. As long as we believe in what we invested in, and I do, we are just fine. It’s called a bear market for a reason.
The breakeven point for miners is a critical factor. Some will cave, and others will hang in there. As those who throw in the towel grows, the difficulty to mine will fall accordingly, and that will bring down the breakeven level as rewards go up relative to the cost to mine. The Feb. 6 low of $5,873 basis CoinBase is still the figure to watch. If price breaks that level, a flash crash is certainly in the cards.
That might happen as well! If we break that level, we will probably break 244 billion market cap support as well. All hell will break loose.
Of subject: are you a football fan? I mean World Cup. There is a contest going on, it’s still on. It’s orginized by @blocktrades, @acidyo and @anomadsoul. There is 2k Steem price for the winner. Already record breaking participation. I’m your follower and if you are a football fan I would hate it if you missed it and I wouldn’t let you know. This might relax our minds a bit from this stressful crypto bear market 😆.
Thanks for the heads up. Looks like fun. Surely a great way to motivate ourselves to follow it a little closer! Got my post up just in the nick of time.
Edit: looks like I missed the deadline. Shows you just how out-of-touch I am. 😖
Its common sense to go right when the crowd is going left :^) I think the focus should really be on quality, don't grab shitcoins, get the quality ones with strong projects and communities that are always the first to recover after the market stumbles. Everything around the top 20 should be a safe investment and Steem of course which should be a top 10 coin anyways :^)
I agree that quality should pay off long term, in fact, long term investors must be very happy with current prices!
Both Rothschild and Buffet are not rich by an accident. Thay may not understand crypto, but at the end it’s all the same. Buy when you are scared to buy! Sounds scary right? That’s what they do. It’s all the same, stock market, real estate, crypto... I’m glad I was accumulating at around where we are right now and I’m ready to add if we go even lower. I just don’t believe it’s over. When people start saying the days of crypto are over, that’s when we finaly start the new bull market. When Bitcoin was at $20000, no one believed it may drop to $10000. When we were at $10000, no one believed it may drop to $6000. Now we are at $6000 and everyone is talking about much lower price. Do you get the point? I think we are very close to the bottom. It’s painfull to watch this market to fall that much especially when you are invested, but where is no pain there is no gain. It would be too easy if everyone made money. As of now, I still don’t see the blood on the street as you say, at least not yet.
You're narrative is spot on, and the fact that people are beginning to shift towards collective negativity is a long term positive too. We might not be there yet, but we're certainly on track! Volume is picking up on the downside with all kinds of bullish divergences on the technical indicators.
Another way to see this is the thought of asset prices adjusting and reverting to the mean. Just as the valuations were overbought early this year when the market cap surpassed $800 billion, we could see overselling to the downside whereas the mean is somewhere closer to where we are today if you look at the long term chart. The reality is that fundamentals are strong but not enough to support certain valuations whereas the amount of supply has inflated since the hype occurred; creating an overhang of pricing pressure in the order books across the industry. So, it seems that we are soon seeing the opportunity to buy into the fear of others; I know I will. However, note that markets can remain irrational longer than you can remain solvent (someone said that too). So be careful as you can be trying to catch a falling knife so again do not risk more than you can lose!
No doubt about it that markets can remain irrational longer that you can remain solvent. Especially when dealing with speculative investments! That's why I always caution people to never invest more than they can lose. If you're doing that, then it's the long haul that matters, not the day-to-day fluctuations. On the other hand, it's a different matter for short term traders, but, nevertheless, they too should be focused on best practice risk management, trading in appropriate size, using good stop loss strategies and the like. In short, no matter how correct we are about the long term, irrational short term fluctuations can break the bank if you're not correctly positioned.
I've heard the first quote within the first week I got involved with cryptos. Time and time again, I noticed that it's true. When everyone is selling off, it's best to be buying because the prices are down. Most investors know this and they apply this when buying.
Sadly, crypto markets brought in a lot of new people, new investors who have never invested before. A lot of these people bought at the highest prices and started selling off out of fear when they saw the color red.
I think the crypto market is going down so hard mostly because of the newbies that know nothing about investing. A lof of people wanted to get rich with cryptos but they couldn't deal with the fear
Yeah, there's nothing new under the sun when it comes to auction markets. The only thing new here is crypto itself, but market psychology is the same here as it is in any other market. There's an old saying that goes like this: bulls make money, bears make money, but the pigs get slaughtered, and it happens over and over again, and the terrible thing is that it's almost impossible to change: for as much as you want to help others break the vicious cycle, it's a very small percentage that actually want to.
A diversified quality basket can mitigate the losses but it is the whole market that is bleeding right now. Nonetheless, yes, I am buying right now...hoping we will not fall deeper but if so, I will buy more ;-)
Steem on!
Yes, the whole market is struggling, but some issues will never come back, and that's where the risk is: if you're mainly involved with the most speculative, and only a few, your risk rises dramatically, but if you're involved in quality issues, and diversified as well, then your risk goes way down (relatively). Of course, your possible returns fall too. 🙁
Poor crypto’s likely forgot the next sentence uttered by Rothschild : “unless it’s your own blood
So true. That's what keeps you from selling at lows!
A decade from now there will be investment advice in Investopedia that says "if you want to profit handsomely, go at least 2/3 in on Dan Larimer blockchains". 😀
STEEM and BTS for me...all the way....
I am not buying at the moment but I am not selling. HODLing when others are losing their heads. These two blockchains are processing over 75% of all blockchain transactions each day. That is an insane metric no matter how you break things out.
The blockchain with the activity wins in the long run. Unless the others can start to crack that @dan hold, this game will be over before it starts.
Those are some amazing figures! I agree with you on your activity metric, but we must keep a close eye on the competition, Lightening Network, that is. 😉
I remember the story of the alamos, they they are wrestlers that fights dirty, most gamblers around then always bet on the feeble wrestlers, the concept is that the weakest carries the highest odds. These men believe in the concept of "all in or nothing", so when their bet pays off, they cash out real big.
I always remember this story of the alamos whenever am at a cross road between two options, then i'll scream aloud and say to my self, remember the Alamos.
What am simply saying is that this is the best time to invest.
Thanks for sharing @cryptography
Still, with something as speculative as crypto, I think it's highly advisable to only invest what you can lose. That being said, "all in or nothing" with that, whatever amount it may be for each of us!
Yeah I agree, its advisable to invest what you can do away with.
Thanks
All of them are right. Actually absolutely right.You see there were always ups and downs in any kind of investment but when you have the clarity to hold when you're supposed to and sell when it's a good time you always end up to the winning side.
I keep telling myself that now s a great opportunity to buy, I said the exact same thing a week ago and two weeks back also....but it seems we are in a constant downfall and although a read the news and try to be as much informed as I can, lately, I read nothing positive...
I wish there was a way to at least make the markets be more stable,but over the last five months,every day feels like a nightmare. I know that cryptos are still in premature phase but having witnessed last years bull run it is hard for me to believe that we will be lucky enough to see such a trend in the following years...
And I know how much we all need this change. How much we all need to see the world open its eyes and see what we see in cryptos,so unless there is a great mass adoption I believe we will all be puppets in the hands of anonymous whales who keep manipulating the market...
Have a great day @cryptographic
Buying little by little on the way down is one of the best strategies out there. No-one ever knows where the bottom might be. And then once it starts rallying again, if you're still not fully positioned, you can nibble on the rebound too. As you say, scaling in when everything is bleak, and scaling out when everything is rosy, is a very good way to help insure you always end up on the winning side.
For what it's worth, I expect at least one more big exponential move higher, that proportionately exceeds the former to the same degree it proportionately exceeded its predecessor. But remember, that's just one person's opinion. 😉