Bitcoin has had a rough past couple of months and we've come full cycle now - Last November I made a video around $6k where Bitcoin wouldn't stop rising and now here we are in June with Bitcoin near $6k and it won't stop falling. Why does this happen? In short, the snowball effect or momentum.
One lesson passed onto me was that while technology always evolved, human nature does not. When we look at the price of Bitcoin (or any other cryptocurrency), we are peering into the general perception of Bitcoin. We are not looking at a graph based on fundamentals or how the technology has improved (e.g: Bitcoin reached its peak in December / January, when transaction fees averaged $40). With that in mind, what has changed?
Well for one, the catalysts that drove Bitcoin to $20k (e.g: hard fork excitement, futures, Wall Street adoption) have become "old" or nonexistent. When some hedge fund manager says he's bullish on Bitcoin, it's no longer the type of event that gets everyone riled up. When a smaller hard fork occurs, no one cares anymore. And the millionth time that the SEC suggests they don't want to regulate Bitcoin as a security, it probably won't spark as much interest either.
As price has headed down, people start to think more and more that Bitcoin was a fad. Keep in mind that many people only invested because they saw how many people saw Bitcoin as the "next big thing" or the "biggest innovation since the internet." But now all of a sudden, criticisms from big names like Warren Buffett start to feel like they are a lot more true. Even my YouTube channel has called Bitcoin a bubble since close to inception and now that claim seems "scarier" because price action has validated the idea more.
But doubt is not only coming from within the cryptocurrency industry. Stocks have had a difficult time gaining traction in 2018 since the top on January 26th and since then, we've seen sideways trading action. The past week has been difficult due to trade tensions with the EU due to Trump's isolationalist economic policies. Investors are starting to go more risk-off which has sent bond yields downward as investors flock to safe havens DESPITE the fact that central banks are trying to move away from low interest rates. This risk-off environment naturally goes against one of the riskiest asset classes out there, cryptocurrencies.
If you look at the viewership of websites dedicated to cryptocurrencies (which you can see on Similarweb.com), you'll find that most websites are only at a fraction of where they were before (Coindesk is estimated to be getting 25% of its peak monthly visitors). The same is true of all other types of media - Back at the peak, it was a "requirement" to report on Bitcoin daily. Now it's reported on far less frequently as the interest is no longer there.
For people looking from the outside, Bitcoin really does seem like it was nothing but a fad. And now that there is less bandwagoning, people are more open to saying that perhaps Bitcoin isn't as useful as cryptocurrency enthusiasts made it seem back in the months leading up to December. That makes attracting new money difficult now that Bitcoin has burned many people and the "word of mouth" isn't as kind as it used to be.
Will Bitcoin make a comeback? Well at the very least, it will almost certainly have a period of astronomical growth again - Cycles like this are common in markets governed by perception. It's impossible to say if it'll go back to $20k or when the cycle shift will be, which is part of why I've shifted to a buy & hold strategy as opposed to trading like I was back in November and December. And yes, I still think Bitcoin is a bubble.
A quick update on where I've been: No where special - Just tired of the cryptocurrency news cycle. I have never absorbed as much content on a daily basis as I did for cryptocurrencies and I only did it for the YouTube channel - it served almost no benefit to my investing (and one could argue it was detrimental as sometimes you get distracted by day to day stuff and miss the big picture). Eventually you get tired of hearing the SEC say the same thing about Bitcoin for the millionth time and everyone getting excited, or hearing what so & so said about Bitcoin or seeing people defend it / attack it blindly. Anyway, I doubt I'll go back to the multiple videos a week, but I am thinking about at least uploading once a week on Fridays perhaps. Hope you've all been well while I've been absent! Also check out my Twitter if you really want to stay up to date with me: www.twitter.com/Truth_Investor.
Welcome back!
It was you who brought Steem to my attention, and I thank you for it.
Your downbeat approach gels well with my the-empires-been-in-decline-for-a-hundred-years Britishness.
I'd love to hear from you weekly, as I know you'd vomit before you'd actually shill something.
Your understanding of markets is peerless (up there with Alessio Rastani), and you freely admit that your understanding of Crypto technology is not as high as that.
For that reason, I think you tend to underestimate some of the real innovations that Crypto has brought us, in particular the idea of tokenized social media (à la Steem).
In my opinion, either Steem or EOS or Mithril or someone other social media crypto is going to suddenly crack the algorithm that sets this sector on fire, in a way that really gets ordinary people outside the crypto sphere involved and excited.
I say it again. WELCOME BACK! :)
Esperemos que sea Steem
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Welcome back! I missed your videos mostly because they show a different perspective of the market while the crowd screams around repeating whatever suits their wish.
Good to watch you again!
Big supporter here, no matter what your opinion is. Your opinion always matters, keep it up.
Thank you for another critical video
Im happy I pulled out in February, I am very sorry for those who got burned by this
As was stated - this drop tells nothing about the tech, its all about the mental market mob... So its sad to know people who invest in the tech are loosing money because the dominant market force are short-sighted speculators
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This is a complex issue with no easy solutions. Next to none smart contracts will be be bug free so major bugs will happen.
In theory there should be some roll back procedure but the problem is how do you police it and who does the policing. It could potentially open the door to "too big to fail". If the ledger is no longer immutable it kind of defeats the reason for using a block chain.... upvote done sir...
I follow pretty much the same strategy as you. The crypto might go down more, but i don't sell. I will buy in sub 5000$ and lower price range. Just never dedicate more than 20% of your poryfolio in crypto and no leveraging, so yhat you can play this game in a long run.
I always appreciate your meta analysis, welcome back!
Hi,
What you saying about BTC makes all sense to me. I too have watched it go up high in Nov 2017 and coming down since then to now.
Now is still good time as ever to buy more?
I am still waiting for $5k before I pull the trigger on more (since I already have enough otherwise).
Sounds like you are expecting the price of BTC to tank more.
Well idk if you would consider this a continued fall...
Welcome back. Bear market, risk off, quantitative tightening, crypto-asset prices in free fall, what else is new? We shall see. You are the harbinger that the bottom is in. Here we go...up, up and away.
Blockchain is the tech that will grow in this industry and whatever project can attract a massive amount of developers to build useful dApps will come out on top. Bitcoin just lacks utility...
The price action is definitely part of a market cycle for new asset classes where value is difficult to determine because if the infancy of the businessnor technology. In the case of Bitcoin, it has been irrational on the way up which has made the reversion to the mean to be a tough ride down for most, particularly those that got it during the hype. Now fundamentals need to catch up to prices in order to gain interest. While regulation is still uncertain, it will be a pivotal point as most institutional investors have channeled capital to infrastructure plays and businesses rather than the assets themselves due to regulatory uncertainty and security concerns.
Somehow hearing from you again feels like a good sign even though you mostly enumerate bearish points in your video. I guess it is because your voice is associated with good old bullish times. Talk about perception!
Hi!
1.Don't you think that you are calling for selling low?
Think about it.
Last time I heard from you, you were calling for the second run = had the same herd mentality as the majority of the market. (don't mean to offend you, I was even worse, I was HOPING for the second wave).
In my opinion, the next stage in Bitcoin price should be the accumulation phase before the next bull run. Don't know when though.
2.When the global uncertainty in the financial markets is on the rise, don't you think that Bitcoin can become a good hedge against all other markets?
It has exactly the right philosophy behind it. Screw bankers, politicians, debt and all other stuff. Also, it is perceived as a SoV.
Even as it is a riskier asset, adding Bitcoin to a portfolio decreases the overall risk of the PORTFOLIO according to the Harry Max Markowitz portfolio theory.
Good to have you back. Checked my youtube literally every morning. Don't watch other crypto youtubers.
CryptoVest,
Thanks for the post. I can relate to getting tired of the weak news cycle.
Have you considered doing a risk management series? Position sizing determination, stops placement and management, etc. You are an effective trader and I am sure you have lots to share.
Cheers,
Sean
I actually thought you died bro. 😅
You should inform people when you are taking a break by posting on steemit, YouTube or Twitter (I don't have an account so I don't know if you did post) .
Welcome back! ☺️
Another great and honest video and I am glad you are still here and doing a crypto-related video from time to time. Looking forward to your upcoming videos.
I think that ethereum will start the next bull run and everything will follow.
Welcome back, I was wondering if you were ever coming back to Steemit. I hope all is well!
Glad to see you made a new video, i am sure no one will blame you, the market been same shit different day lets admit, everyone is just waiting for some type of big new news to happen...but when the market gets cold.... something usually brews...
שבוע טוב לכלום
re-posting my youtube comment here:
I was honestly wondering why I was not seeing any videos from you. If you decide to resume a regular production schedule, allow me to suggest a focus on the discussion of value metrics for cryptos, rather than price action. Several months ago I decided I needed to adjust my strategy on cryptos and I transitioned into a simple long only 12 and 26 day EMA crossover strategy. I made this decision in time to go mostly to USD mid-May for BTC and LTC and late May for ETH. If the recent pause in the drop of all prices matures into a reversal then I'm well positioned to get back in when the bullish crossovers happen. I've decided on a 50/30/10 percent allocation for BTC/ETH/LTC. The relatively heavy ETH allocation is based on my belief that the smart contract features will continue to grow in value.
Thanks for creating and maintaining one of the saner crypto channels. I look forward to your next video.
Fantastic post friend
have you guys heard the big news? https://cryptomode.com/the-united-states-sec-has-voted-in-favour-of-easing-etf-approvals/ could be the start of a beautiful thing! market will probably enter bull market when this finally is approved.
For many altcoins there is a strong relationship between their price in BTC and price of BTC in USD. Scatter plots of such relationships shows that some altcoins (ADA, BTG, BCH/BCH, NEO, STEEM) have higher growth potential then others (ETH, TRX, XRP, XMR). As bitcoin is near this year’s low I have bought altcoins which I consider to have a high growth potential in relation to bitcoin. Any thought on this trade?
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