It’s been a quiet few months in cryptocurrency, and I wanted to collect some thoughts here on what I see happening and what we might see happen in the forseeable future.
One thing that is helpful in this situation is too look at historicals. The reason is, the markets is one place where history almost always repeats.
We see this in the stock market all the time – a bull cycle lasts 7-10 years, a bear market hits and wipes a few people out, then a bull market returns for another 7-10 years and so on.
The interesting thing about cryptocurrency is, it follows slightly different rules. There are a few reasons for this:
The crypto market never closes.
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Unlike the NYSE, which has an opening and closing bell, and shuts down on the weekend, the crypto market is always moving, 24 hours a day, 7 days a week, no public holidays.
The crypto market is global.
Therefore, when the USA is sleeping, Asia is wide awake and trading. When Asia is sleeping, Western Europe is keeping the market busy.
For these reasons, the market moves much faster than traditional markets. One day in crypto is the equivalent of 3 days’ activity in stocks, as the stock market only trades for 8 hours, while crypto goes the full 24.
Add in the fact that there’s no weekend or public holidays, and that’s another 120ish days of extra activity.
Add in the fact that the potential market is 198 countries instead of just one, and you’ve got a pretty big multiplier on your hands.
Therefore it’s no wonder that crypto has gone through 3 bull-bear cycles since 2010, while the stock market is still running out the same slow bull.
Right now, crypto is deep into another bear market, and Bitcoin is down to around $6,500 from its $20,000 high in late 2017.
While that may seem painful, if you draw out the timeline a little, Bitcoin has still been a phenomenal investment for most. From under $1 in 2010 to over $6,500 today, that’s a ROI that exceeds any other investment you’re going to find during that time period.
What’s more, we’re seeing a lot of great developments in cryptocurrency at the moment. The Lightning Network is developing fast, a Bitcoin ETF is coming closer to reality every day, major banks all around the world (USA, Russia, Switzerland, UK and many more!) are setting up crypto trading, mostly to high net-worth clients, venture capital is still pouring money into the space, and, most importantly, teams are building.
Any savvy investor knows that when the news and fundamentals are good, but the market is tanking, it’s time to accumulate. Price is a poor predictor of value. What determines value is ideas, progress, partnerships, vision, which many crypto projects are executing as we speak.
I predict in a few years time we’ll look back on mid 2018 as the time when everyone “wished they’d invested” and we’ll be kicking ourselves for not accumulating more at such crazy low prices.
Again, this is not financial advice. Do your homework, and good luck out there.
Projects I’m holding and accumulating: Bitcoin, Ethereum, Litecoin, NEO, Stellar, Vechain, OmiseGo
Projects I’m considering accumulating: Elastos, Ark, Ontology, Monero, Dragonchain