I hesitate to share on this platform, letting perfect be the enemy of good. Even more, the enemy to my success has been the apparent ease of simple strategy. Yet, many fail to appreciate the brilliance in simplicity, myself included.
Saving in Bitcoin is more profitable over the last 5 years versus the S&P 500. Despite the current bear market, the long-term strategy for saving nets more with cryptocurrency over the traditional investment vehicles. Traditional investors contend that Bitcoin isn’t profitable in the short-term, but three months windows are insufficient to realize the gains.
They argue that Bitcoin doesn’t serve as a hedge against inflation. They might be right, if Bitcoin were simply an financial investment, and they focused on the year-to-date.
However, Bitcoin represents a technology and paradigm shift of larger scale. Electronic cash to accompany the exchange of data creates an internet of value, as popularly coined. The idea for distributed ledgers holds implications for more industries than finance, which explains why that industry itself didn’t produce this breakthrough.
The innovator’s dilemma, a situation where firms would not seek to uproot their own business by creating an advancement that obsoletes them, in short.
Saifedean Ammous, author of The Bitcoin Standard puts the matter succinctly.
The choices are bitcoin or poverty.
Without overstating Ammous’ opinion, gold and other investments pale in terms of profitability. This author attempted many strategies to accumulate wealth since his entry into the space in 2017, but he returns to an age old adage.
Keep it simple. Holding Bitcoin and Ethereum might be the best bet compared to holding onto the belief that blockchain will not revolutionize our world as we know it. Smartphones did the same, just as the Internet did before it.
Curious how the crypto winters last through the seasonal summers, and the heat ticks up in bull markets typically when snow falls in my city. Heads of companies become quite insightful when the market lulls and those in search of quick bucks flee the scene.
Jason Yanowitz, co-founder of Blockworks identifies three stages of a bear market, described in a blog post from 2018, by co-founder of another firm, Union Square Ventures. Fred Wilson highlights them as follows.
Stage 1: The Unwind
This stage’s greatest trick was to convince everyone the bear market didn’t yet arrive. Sadly, even this humble author missed the signals.
Stage 2: Forced Capitulation
At this stage, the market displays bearish signs distinctly. For example, companies, in order to survive, downsize like Crypto.com letting 260 of its staff go. In fact, they’re not alone as BlockFi cuts 20% of its staff to prioritize profitability.
Stage 3: Bottomless Exhaustion
The market becomes lifeless at this stage. In the silence, no new projects stir, no commentaries observe anything and the price movement plateaus.
The aforementioned stages sum up the slow approach of a different season for the digital assets. I contend that while the stages are accurate, the condition at these stages are too simple.
In fact, there are signs of life in the last stage, though many users are either too numb or absent to bear witness. The projects of true value glisten at this bottom of the market, and those determined to unearth them do not go quietly.
If they did, you would not have the pleasure of reading these observations. Some insist Bitcoin isn’t a hedge against inflation, others claim that at the worst of the cryptocurrency markets, life sits still. I posit that traditional investors and adopters alike hold half-truths.
The whole truth remains that this technology remains the trade of the decade in tandem with individuals like myself, offering goods of true value- projects, works of art and the like all for newcomers and experts to appreciate.
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