Crypto Ramblings Sep 17
I did make a quick post that there is a crypto GSS that was happening in early Sep, and now I am fairly certain that the bulk of the downside has passed. Rest assured, my money was where my mouth was at and I was buying all the way down (from ETH 388 all the way down to 262).
In just 4 days at the start of September, ETH dropped a massive 29%, lol.
BTC was not spared either and dropped 15% during the same time. But remember now, BTC is supposed to be the bigger, stronger and more mature currency.
Since the 1 Sep highs, BTC's drawdown hit 25% (it touched 40% in the last crypto bear) and ETH's drawdown was slightly deeper at 35%.
I hate using the word FUD, but there is a lot of fear, uncertainty and doubt.... by people who aren't invested in crypto. Since I've started my crypto journey and more of my friends have found out that I am doing it, I've received a lot of FUD articles with the recent drop. I know its half concern and sincerity - they know that I'm in it and they want to tell me about this news - but I also know that it is half "I told you its crazy and risky, get out now!".
As convictions go, I'm a complete convert of cryptos.
Honestly, people talking about whether its actually worth anything or not are years behind the current situation of cryptos now. We are long past the discussion if cryptos are worthless. Talking about cryptos if you're up to speed on the discussion is never about "well what if you wake up tomorrow and cryptos are worth nothing?" anymore. They are DEFINITELY worth something, the question now should be, how much?
Governments are not banning it and calling it scams anymore. They are instead trying to regulate it and stem retarded investors from getting burnt in it. We've past the phase of denial of cryptos and we are currently in the bargaining and negotiation phase. Within 2-3 years, we should be firmly in the phase of mass adoption.
The China crypto news isn't that cryptos are illegal. It is that fundraising through ICOs is illegal and should follow a proper process. The news of possible exchange closes is another thing - most likely the need for licencing to continue operation.
The prospects of crypto are EXTREMELY rosy right now, due to the fact that most people are NOT in it yet. When the rest of the world jumps on board the crypto train, it's going to end up like any major world currency, except news that move it will not be domestic numbers or election outcomes - it would be technological updates and adoption metrics.
One of the more interesting and mainstream usage of blockchain can be clearly seen by AXA's integration of travel insurance on the Ethereum blockchain. I fully expect more and more businesses and services to be built on PUBLIC blockchains where everyone can verify the authenticity of the data.
In other news, there are tons of crypto ATMs being rolled out all over the world, exchanges for crypto-fiat trades are exploding like wildfire everywhere and governments and businesses are hiring blockchain experts and integrating blockchain solutions (ala our very own Project Ubin).
Honestly, if you are STILL skeptical of cryptos as a technological force to be reckoned with, you must be extremely tech unsavvy to be unable to grasp what a massive leap of technology we are at the forefront of.
That said, progress in blockchain tech does NOT equate to massively awesome cryptocurrency returns. It does seem very correlated for now though.
I currently have 2 independent thesis on why crypto is going to make me insanely rich and fabulous.
1) The world realizes the need for SOME VERY IMPORTANT THINGS to be decentralized. A lot of trust systems will move onto the blockchain - simple cannibalization. And trust me, there are tons of things that SHOULD be on the blockchain - any kind of contract imaginable, ownership deeds (which includes every single financial assets that you can think of - real estate, stocks, bonds, etc), important snapshots of data... as long as people are willing to pay for an immutable copy to be kept on the blockchain, it will be on a blockchain and money is going to change hands.
2) The world realizes that the current monetary system of credit and debt is completely retarded and unsustainable in the long run and people actually move away from manipulated fiat currencies and adopt globalized and fair cryptocurrencies instead. Unlike precious metals, cryptos are extremely feasible and would actually be the preferred currency in today's day and age. (Precious metals will still be valuable in such an outcome for sure though, don't get me wrong. I've liquidated everything else except my precious metals, haha)
As much as I am sure that outcome 2 will happen eventually, I'm banking on outcome 1 to happen first, and guess what? I can already see all the gears in motion for that. No, even more than that, I am invested into cryptos that will be used in all these future applications of public blockchains.
Oh and for those wondering how my portfolio is doing with the crypto CRASH (yes, more than -20% is considered a crash), I'm very glad to report that I am STILL in profits. I wonder how fabulous things are going to be when the market eventually recovers? All the cryptos that I am holding onto have plenty of good news coming over the next few weeks and months. To be honest, if they don't double in value I'd be pretty disappointed. Cryptos have entirely screwed up the expected returns that I expect from investments now. And guess what? Amongst my crypto peers, I'm the most lowball in terms of returns expectations!
So the big question that you have all been waiting for: Can the market go lower from here? Probably unlikely, but it is certainly possible. I'm thinking that it can poke lower and bounce around these areas, but I'm looking at a recovery from these levels, not a lower move down. I've fully invested my portfolio allocation for crypto at this point of time... is that conviction enough? That said, I'm all prepared for shit to hit the fan. My lower bound estimate for BTC is $3000 and for ETH is $120. When it reaches those levels, the warchest dust will be blown off and I will be ALL IN at that point of time - I will live and die by crypto.
Perhaps in the future when I look back at this post, I'd ask myself why I didn't go all-in when this might be the last chance that the world sees sub $300 ETH.
I guess my tune and optimism might change if (note that I did not use when) my portfolio finally goes negative, but for now even with the huge downward moves, I sleep happily and comfortably at night.