Sound ideas on how to play the alt-coin market, and for what purpose
I watched this video again. Yes, again, because it is that good.
https://www.youtube.com/watch?v=WAbfiLGaGD8
It is a video by Gerhard - Bitcoin Strategy entitled I did this mistake 😔Please don't do it...
It's worth watching because he is giving some very good points about playing the alt-coin market.
I am trying to assimilate those ideas so I am writing this post.
The key point is crypto market isn't like the stock market, and investing in a basket of assets as we do in the stock market won't work. This is because crypto projects aren't as well regulated as publicly listed companies that issue stocks. This puts us at a disadvantage when others have better information than us, and when they buy at a way lower price than us... they can easily dump it on the market. Indeed, this is what I would do if I have a bag full and they mooned. The correct thing to do is to take profit. When many people do that, the price will drop. Thus the volatility in the crypto market.
In short, we shouldn't be viewing the crypto market as having the growth nature of the equity market. At least not yet, and it certainly does not make sense to buy a basket of alt-coins and hope that they average out the gains and the losses to give us some profit.
It seems that it is better to stack BTC instead, as that is a better way of capturing the uptick of overall blockchain adoption. DCA into BTC seems to be the way to go.
That is not to say that there is no way of making money through the alts. One thing for sure, success is not through buying 20 different tokens. Rather, it is through investing in projects that one knows well. Be the one who buy low sell high, so to speak.
Here my takeaway is that almost certainly, one should be playing the alt-coin market for the purpose of buying more BTC with the gains. My personal hunch is that it is impossible for the crypto market to function well if BTC diminishes to what an alt-coin is like. First, as it exits its number one spot, losing its dominance, many people will withdraw their funds and go back to fiat. The confidence in the alts and crypto projects will falter. Many altcoins could either disappear or suffer huge losses. There will be no Alts/BTC pair to trade, i.e., the base currency that supports the trading of alts will be gone...
In conclusion, one really has to be very cautious when investing in the alt-coins. As for Hive, I am investing what I need to use this blockchain advantageously, but of course, since I know this network well, why not accumulate a big bag to later sell it to buy more bitcoin!
P/S: This is not financial advice, and please do your own due diligence before investing.
If you read this far... and if you are a like-minded Hiver who is on the path to learning more about Hive and crypto investing, and if you like to be tagged when I write such posts, I welcome you to leave a comment below and let me know. We can form an alliance to support each other's growth.
You might be interested in this post, @thatkidsblack, @graciousvic, @peniel2010, @deflacion, @jacoalberts, @limonta, @young-kedar, @svanbo, @sumotori, @zakludick, @poplar-22 and @hankanon!
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