It’s been a tough couple of months, and there have been no safe havens.
I admit that I didn’t see it coming, and perhaps I should have, but just like every bubble in history it’s clear as day in hindsight.
It’s been very interesting observing my emotional reactions as this market plunges, as Bitcoin drops from the 15’s to the 6’s. And it’s even worse for tokens and alts. My reactions have almost exactly followed the labels on the bubble hype cycle: denial, fear, capitulation, despair.
I’ve done my best to follow my own advice: don’t panic sell, don’t invest more than you can afford to lose, and if you can’t sleep at night you have too much in the market.
As this crash started, I figured it was just like every other “crash” where we lose 30% and we are back on the road in three weeks. Then it wasn’t. Sometime in February, I started not sleeping, so I sold a chunk of EOS at $16…which, of course turned out to be a good move. That got me through.
But then I did something stupid…
In March, while things were hovering around $11,500, I figured that the carnage was over and “Why am I on the sidelines?”. So I put the EOS proceeds back into Bitcoin just as things took their next leg down.
Finally, upset at myself, I cut my losses because I again wasn’t sleeping.
Now i’m fine, and i’ve learned a lot.
What do things look like now?
Well, sentiment is in the gutter. We are certainly in a bear market.
The traders want to go to 6000 so bad they can’t stand it. It’s been that way for weeks. We may get back there, just to have a nice double bottom. Maybe things go south after that and we revisit 3-5k, but I don’t think that’s likely, but act as if it’s entirely likely.
The first question is: “Do I still believe in cryptocurrency and blockchain?”
If not, then the whole thing was tulips, and you should sell everything now and get out.
Personally, I’ve never been more confident that cryptocurrency and blockchain technology is on its way to changing the world. The hype cycle just got ahead of the technology.
My position has not changed: I still believe that Bitcoin will be 800,000 or 0 in 5-8 years.
Very quietly, the lightning network is rolling out slowly. We are in beta, and Blockstream has been releasing applications for everything from tipping to point of sale. Wallets are beginning to integrate lightning. We are six months away from instant, reliable, practically zero fee payments on the bitcoin network.
In the token market, there is still a lot of regulatory uncertainty, but when we move through that, by this fall there will be platforms beginning to launch. At that point, high-quality projects will diverge very quickly from low-quality projects. Scam coins will (continute to) head south.
I’ve gotten out of Bitcoin Cash and Litecoin. Having gotten into Litecoin at 45, i’m happy to take a 3x return. I just see no reason for them to exist when the lightning network is active.
This is the time where you do your homework and you look around for high quality projects that are selling at a huge discount…only if you can afford it financially and emotionally.
This thing ain’t over. Just like every other bubble in Bitcoin history, in a year things will have turned around. The smart money will position themselves for that.
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