Market lost +60% in the past 6 weeks. Indeed it can look a bit scary, but it’s not even close from the massives 2011 & 2013 crashes. Back then, the mood was totally different. People were literally crying and had no more hope for better days… That being said, i have no idea about when this winter is gonna end, and this is not what this post is about. But tbh, I hope it will not be to soon. In fact, the more the bear period will last, the more healthy the next growth phase will be.
Why is this a good thing?
The end of 2017 was a crazy rollercoaster. Growing +5% to +10% per day was obviously not sain and sustainable on the long term. Yes, it was fun, and we’ve enjoyed the craze, me included, but the party is over. Sadly, few people have learned the hard way. Mostly the one that has joined the market during the past 4 months (and many does). To newcomers that have lost money, i can only say one thing : be patient. The Long term strategy is always the winning strategy. As a well known wise guy says once “The stock market is a device for transferring money from the impatient to the patient”. (Sup’ Warren)
The good side of this massive correction?
- Gamblers and speculators are (partially) out. 🤡
- Since years, the market gains more awareness in every rally and dips. 🕺🏻
- XRP, TRX and others useless coins divided by 10. 😈
- BitConnect is finally out. Tether might be (soon) as well. ✔️
- Scammy ICOs will slowly disappear 🙏🏼
This was somehow predictable.
Indeed, it’s always easy to say it afterward… But as we all know, markets works in cycles, and we have been seing this ‘January dips’ pattern many times, often described as “the pre-Chinese new year”… The theory is pretty simple : China still being a country that owns a consequent part of the global coins market, a local sell as big impact worldwide.
But beside the classic pre-Chinese new year period, these last 6 weeks had many bad news and events that amplified this massive correction… From the global over valuation of the Token market to the threat Ban from many China, India or Korea, the Bitconnect scam, the weird BCH listing on Gdax, Facebook banning ADS about Crypto, rumors around Tether solvability and then the subpoena, the big amount of newcomers panic selling, and the the MASSIVE media FUD. It was inevitable.
Don’t play. Go long term, be patient.
My friend Henri said once “wow, we’ve built trustless distributed databases… It’s very cool, so what? Even if the cost of trustlessness is high, with it comes poor performance, latency, and so many other problems that makes a computer system really shitty”.
Well, i could not have said it better. In fact, we’re just getting started here. Even if the core-technology works today, it needs to be able to scale before starting its consumer adoption phase. Compare this to the internet 56k dial up of the 2000’s… You remember, the noisy one? Here we are. It will took a bit of time to be mainstream, as consumer facing products and infrastructures are far from being ready right now. Once you’ve get this part, it is way easier to have a good understanding about what’s going on, ans why patience is key.
The advices i’ve always gave to friends & fam’ :
- Do you truly believe & understand the impacts these decentralized services could have on our society, our lives and children’s lives?
- Do you understand the coin-token-tech you are investing in? Have you at least read their white paper, checked the team, look at their market?
- Do you understand that the majority of the companies in the space will die over the next 5 years, and only few winners will potentially take it all?
- Do your own research, go long term, listen to no one, be paranoiac about securing your assets and of course, please, invest only money that you are ready to (totally) loose.
Since i’ve been started this post on an hard note, let’s finish on a good one…☀️Chris Giancarlo, the CFTC Chairman, made some awesome comments in front of the SEC tuesday. More infos here (love this dude already) https://www.reddit.com/r/CryptoCurrency/comments/7vo5ov/cftc_chairman_gaincarlo_just_made_the_most/
You’l also find a more detailed (15 tweets) thread from Peter below.
As Ouriel said recently, “we need less speculators, more long term commitment.” So if your one of these, just sit back, relax, and stop checking your portfolio every 10min. Simply believe in the long term value of crypto assets, keep reading/learning about it and wait for better days 🤙🏻.