Sleeping through the dips

I should just never go to sleep. Every time I do, I feel like I am missing out o opportunities, which technically I am, as I can't do much while asleep. How am I meant to buy the dip when I am dreaming about having bought the dip? Perhaps rather than setting alerts on price, the alerts should be set on Elon Musk tweets.

I actually don't have any alerts for anything set - I see the dip and buy, or don't. Sure, sometimes I have lowballs set on the markets, but generally I don't have those on Bitcoin at all. I did however pick up some BTC this morning, as I assume that there will be a rebound to come.

There is far more complexity in the markets now compared to the last bullrun, as not only have the number of token projects increased, but the types of tokens there are have increased too. Not only that, the entrants into the market have changed in culture also, with more young people who don't care about fundamentals at all taking shots at the moon. There are going to be a lot of people caught out by this come bear market, and then there will be all the FUD about "I lost it all in crypto" coming out and the MSM will run the stories as exemplary warnings.

If a gambler loses it all betting the farm on a superfecta where they have to place 1st, 2nd, 3rd and 4th in a race and they lose, do you feel sorry for them?

Investing is risky, but it shouldn't be blind gambling, though that is what a lot of people are doing by buying random coins in the hope that someone will pump them. Though as we can see, someone is willing to pump them - but the dump will come and all those that bought at the top are going to see their value drain away very, very quickly. Because these tokens have no actual use case, there is no bottom price for it, other than zero - but if the gamblers took a loan to get into the race, their floor is lower than zero, as they are going to have to suffer the consequences of taking on debt that they may not be able to afford.

The value of any single token is going to be driven by people's belief that it is going to go up further than where they bought, but as there are so many gamblers moving from one token to the next, all of these tokens will eventually drop heavily in price. We saw this in 2017/18 also, where people were buying the hype of ERC20s, only to lose 99% over the coming year and the same thing will happen again on the majority of the tokens that are pumping now, except at a scale a magnitude larger.

As I have said many times recently, what people need to consider is what they are going to do in the coming bear market, meaning how are they going to survive. If the tokens they hold have no utility and will not hold their value, even if they are able to be staked into DeFi projects for a yield, what kind of yield is it going to offer? If selling them at the top, where will that value be held for the following four years or so to maintain value and still be usable? There are options, but "store of value" is going to be hard to choose in a crumbling economy.

In my opinion, at least some of the capital should be put into projects that are likely to go up in value, where business models are built that generate substantial income to validate the investment. But businesses take years to build and there are still no guarantees. A lot of the investment approach now is buy, pump, dump, buy, pump, dump - and it is unsustainable. No business can survive if the investors aren't willing to hold their investment in to supply energy into the development and give stability to attract more investment, but the current approach doesn't care about generating real value, it is after fiat.

To build crypto as an economy, economic mass has to be attached to crypto itself, meaning that the economy has to operate in a way that incentivizes staying in crypto. These pump and ump projects do not and the majority of the people who are getting into them do not care, as long as they get out of them and can buy some fiat to consume more in the traditional economy. They might do this because they feel they don't have opportunity in the current traditional economy, without realizing that they are part of the problem, as they are supporting the very system that is killing their opportunity.

"Let's make money in crypto and then spend it on shit to make the 0.01% even richer!"

Good game.

But eventually, that game ends as the real investors will slowly start to build the business models that work in crypto without having to move into fiat ever. It'll take time and ups and downs, but it will be rolling and snowballing for years to come and all of those people who have made the rich richer, will have missed their opportunity to be successful in the economy again.

While Bitcoin has only been around for 13 years, at some point there will be the concept of "old crypto" in the same way that "old money" is in society now. There are the dynastic families that made their money back in the industrial revolution or the early days of modern banking and have been able to direct national development for generations.

However, "old crypto" will be far more distributed, as the resource isn't location based like oil and the market from the start has been highly global. It will be upon this foundation that the "new crypto" generations will have opportunity to build, because the "old crypto" committed to building the economy and the business models that held it together long term.

The thing is, that the vast majority of people on earth are not entrepreneurs who build businesses and most people are not investors who put their capital behind the entrepreneurs who do build. Most in the world are consumer class and always will be, no matter how many opportunities they are handed to be an owner and supporter of the economy. This hype might be needed in order to attract more people into the crypto industry, but I suspect that come the bear, the majority of those who will be left and active are the builders and the supporters. We have seen this on Hive over the last bear market and as a representation of society, it is indicative of the entire market.

Perhaps there are two mindsets who are buying the dip - those who want to make gains, and those who want to have a larger stake in the future economy. Where that money is spent matters, where that crypto is staked will matter too.

Taraz [ Gen1: Hive ]