‘Is the cryptocurrency craze over or just getting started?’Quora
This is the question I received on Quora a while back. I refrained from answering the moment I saw it because I wanted to elaborate my full answer, not just part of it. However, I have decided I am ready to give an answer.
So, let’s get into it: Is the cryptocurrency craze over or just getting started?
Firstly, the media is always endorsing the worst pessimists. Therefore, it is important to know what these pessimists say. They are talking all day about how Bitcoin is over, it was just a matter of a few months, bla bla bla. In short, these pessimists just heard of cryptocurrencies in 2017, started investing in December and lost most of their money. And they say it’s over. Must be frustrating, right?
A danger in any sort of investment is the emotional side of the investor. It tends to interfere in many market decision, which are only bad influences. I have to admit that my emotional side has influenced me in the past, as it has for everyone. But at least I realised it and I told myself I would try to minimise it in the future as much as I can.
Therefore, it is very easy to be a pessimist. To sum up, Bitcoin and other alt coins has been hit hard with the events in 2018. Regulation, scams, ICO regulation, SEC’s interference in ICOs, more scams, hacks, a little bit more regulation, ICOs cashing their funds in fiat, a little bit of the domino effect and some more regulation on top of this. How would this positively affect the price of any stock, bond, commodity, fund or cryptocurrency? Subsequently, the answer is no, it wouldn’t – because they would all be affected badly. Maybe the increased volatility of Bitcoin is making it fall a little bit more. But let’s remember that this is not the first big fall of Bitcoin. Which means there is hope.
Further, as I have stated in a previous article (link here), Bitcoin has had many crashes up to now. In short, you can see them here:
|06/2011-11/2011||$29||$2||94 days||-93.1%||461 days|
|08/2012||$16||$7||3 days||-56.7%||114 days|
|04/2013||$259||$68||3 days||-73.7%||210 days|
|12/2013-01/2015||$1147||$177||411 days||-84.6%||771 days|
Wouldn’t you be happy if you bought even at the high of any of the past crashes? Cause worst case, you would get a 300% return now (should I say that best case would be if you bought at $29 in 2011 you would have more than 10,000%!!). So people should stop saying shit and looking at the facts. Speaking of them, let’s look at the next part of the article. Is the cryptocurrency craze over or just getting started?
Now that we saw how a pessimist thinks, let’s look at the facts pragmatically.
Don’t get me wrong. I am not asking you to be optimistic, but for the least rational. If you would ask a 100% rational person about the crash, they would ask which one are you talking about. If you would have bought Bitcoin on the first day of 2017, you would still have a 360% return, even with all of the 2018 bear market and scandals. Have you ever thought of that? What other investment has made you a 360% return in 2 years? Therefore, should it really be called a crash?
Moreover, most of the top-tier investors say that the smart move is to buy cheap and sell high. The problem is that, because of the media and other signals, people buy high and sell low, which puts them into a big loss. This is generally caused by FOMO (fear of missing out).
As you might know, the smart investor buys in a bear market, when everyone is selling and pessimism is at a maximum level, and sell when the levels get dangerously high. In other words, they cash in some hefty returns.
Even though cryptocurrencies are in a bear market, they have the potential to go up a lot more than the bull run finished in January 2018. After they recover the public’s trust, they will see another period of growth. That is the best time, after a few years maybe, to see your investment grow exponentially.
So, there is no reason to consider what happened to cryptocurrencies a crash. It is not right, since for the bubble year it still records a 360% return after a +80% drop. Go figure.
Lastly, I wanted to remind that I am a conservative investor and I have said that numerous times. In conclusion, considering there are still huge gains on a longer-term, I wouldn’t consider that any crash happened. Therefore, the cryptocurrency craze is just getting started. It needed a little bit of a rollercoaster to be ready to launch into the next bull market. Buy now and prepare yourselves for the next bull market! Now is the time. Not when it gets in the Wall Street Journal. That moment is already too late.
If you want to add something, leave a comment below. I am also open to private chats: don’t hesitate to use this link.