Please click the link to listen to the 26th episode of my weekly crypto podcast ‘Two Minute Crypto.’ These are intended to be short, single-topic ramblings on some aspect of the cryptosphere. Comments and critiques welcome.
Two Minute Crypto
Welcome to Two Minute Crypto. Today’s episode focuses on the predicament of those investors who bought Bitcoin at or near all-time highs. So, you bought Bitcoin in or around its all-time high. Let’s be honest you more than likely hopped on the crypto train expecting short sharp returns and now you find yourself looking at very heavy losses. It’s been a grim year for that investment and to add insult to injury everyone is more than happy to tell you that you made a clear mistake. This crypto stuff will never work out- Bitcoin is dead – again. It’s on the way to zero – get out and save what you can. And let this be a lesson to you.
Now, if you are still holding that Bitcoin you’re made of stern stuff and in my opinion, you’ve made the right call even at a time where sticking to your investment thesis albeit one you’ve had to alter or concoct after you actually bought Bitcoin might seem somewhat absurd.
Let’s very briefly unpack the absurdity of holding a 3 thousand dollar Bitcoin bought at nearly twenty. On Oct 1ST, 2017 BTC was trading at just over 4k by Dec 1ST it had peaked at 20 thousand dollars. Its since been a slow grind back down to pre-Oct 2017 levels. Good news has come and gone unnoticed, bad news has only furthered declines. Every rally has been a reason to sell.
And yet..if you step back from this precipitous drop and shift your focus to the fundamentals of BTC then the outlook shifts radically. He fundamentals, in fact, have never been better. The struggle for Bitcoins identity has largely passed. Second layer solutions such as the Lightning Network are exploding in capability and capacity. The next BTC halvening is on the horizon. The network remains eminently secure. The SEC has clarified that Bitcoin is not a security. More informed authorities and justifications are beginning to recognize the use-case and legality of Bitcoin. Institutional money though slow to arrive is ever closer to deployment. The support infrastructure of the crypto space has expanded steadily since late 2017. Lastly, the current bear cycle is very long in the tooth with this current downtrend the now longest in Bitcoin’s history.
Sure, BTC may see further steep declines in the coming months. If you need that money to pay bills then, of course, do what is right for your current circumstances. If, however, you don’t require the funds it certainly worth reflecting on how quickly Bitcoin moves when it moves and that’s up as well as down and we’re a long long way down at the moment. Add a dash of renewed patience and a multi-year horizon and this laggardly investment may eventually redeem itself.
Thanks for listening.