BTCUSD: Taking a Buddhist approach: Seek the middle ground.
I'm fairly new to the crypto-currency markets, but have thoroughly enjoyed reading the extreme dichotomy of views. Today I'm hoping to add a more "middle of the road" approach. I'm not discounting TA by any means, but I'm going to say some things that might be contradictory to many points of view and I welcome all constructive criticism in return. After all this should be a place of thought exchange, not a place of ignorance.
Looking at the entire bitcoin lifespan there have been some wild swings. I don't think any one would deny that. However, taking into account the highest highs and the lowest lows, the middle path is probably where we should be setting our sights. We know how high BTC can go and we know how low it can go; every self proclaimed TA expert out there tells us where it should be at any given moment.
What's strange to me is that every one should in essence understand that it can go up and it can go down. However, I don't think people are listening, they are only reacting. Let the following put some newbies at ease. If year end estimates put BTC at $4,000 on the low end and $25000 on the high end, lets say that in reality at the end of the year it should be somewhere in between. All likelihood it will probably finish out the year at somewhere around 11.5k. If we close above that awesome, we're ahead of schedule, but we'll probably see a down turn. If we close below that, wait a few weeks, I'm sure we'll meet the metric.
Next, I want to thank all of the hardcore bears out there that think bitcoin will be going down to zero. With out you I couldn't have improved my position. In DEC I bought some BTC for a crazy amount just to have some skin in the game. What this drove me to do is ask some fundamental questions as an economist. "Why did I do it?" "How should I approach this?" "Does crypto-currency actually fulfill a need in society?" "Is this a long or short term position?" Let's just say now after answering these questions I own about ten times the amount at about half the price. With out the bears and short-sellers driving the market down, I never would have been able to put myself in a better position.
This leads me to why I'm long term crypto and diversified. I don't care how much markets go up and go down. It makes no difference to me because I'm not expecting to get rich overnight. I've never wanted to own a Lamborghini. Drive one, sure, but not own one. Looking at the steady rise of crypto even on the lowest of lows, it's an emerging market and it definitely isn't going anywhere. I can spend day in and day out trying to make 1% or I can spend my time doing other fun stuff. As for diversification, it would be great if every crypto I'm in always went up and never went away. In reality the failure of one crypto means additional funds to another.
I'm going to conclude with this thought though. We have some of the brightest minds in the world working on crypto-currency right now. If you tune out the noise you can easily see that it has "the potential" to be world and life changing. (Long) But why do we see such crazy parabolic increases as of late? Do some research into the Keynesian Cross and market adoption. Developed nations have an advantage here in the adoption cycle because we can receive more information more quickly hence the rise of incoming money. Yes the market cap rises and decreases. Again, look long term. There are certain low points that you just never see again. Secondly, this is going to cause some leap frogging in technology. Just as third world countries never adopted landlines because cell phones were easier to implement, a lot of third world countries are never going to adopt traditional banking systems and go directly to block-chain and crypto-currency. When that happens, it will be the equivalent of a double injection of capital into crypto-currency. First the institutions of the developed world and then secondly the rest of the world.
Looking at the entire bitcoin lifespan there have been some wild swings. I don't think any one would deny that. However, taking into account the highest highs and the lowest lows, the middle path is probably where we should be setting our sights. We know how high BTC can go and we know how low it can go; every self proclaimed TA expert out there tells us where it should be at any given moment.
What's strange to me is that every one should in essence understand that it can go up and it can go down. However, I don't think people are listening, they are only reacting. Let the following put some newbies at ease. If year end estimates put BTC at $4,000 on the low end and $25000 on the high end, lets say that in reality at the end of the year it should be somewhere in between. All likelihood it will probably finish out the year at somewhere around 11.5k. If we close above that awesome, we're ahead of schedule, but we'll probably see a down turn. If we close below that, wait a few weeks, I'm sure we'll meet the metric.
Next, I want to thank all of the hardcore bears out there that think bitcoin will be going down to zero. With out you I couldn't have improved my position. In DEC I bought some BTC for a crazy amount just to have some skin in the game. What this drove me to do is ask some fundamental questions as an economist. "Why did I do it?" "How should I approach this?" "Does crypto-currency actually fulfill a need in society?" "Is this a long or short term position?" Let's just say now after answering these questions I own about ten times the amount at about half the price. With out the bears and short-sellers driving the market down, I never would have been able to put myself in a better position.
This leads me to why I'm long term crypto and diversified. I don't care how much markets go up and go down. It makes no difference to me because I'm not expecting to get rich overnight. I've never wanted to own a Lamborghini. Drive one, sure, but not own one. Looking at the steady rise of crypto even on the lowest of lows, it's an emerging market and it definitely isn't going anywhere. I can spend day in and day out trying to make 1% or I can spend my time doing other fun stuff. As for diversification, it would be great if every crypto I'm in always went up and never went away. In reality the failure of one crypto means additional funds to another.
I'm going to conclude with this thought though. We have some of the brightest minds in the world working on crypto-currency right now. If you tune out the noise you can easily see that it has "the potential" to be world and life changing. (Long) But why do we see such crazy parabolic increases as of late? Do some research into the Keynesian Cross and market adoption. Developed nations have an advantage here in the adoption cycle because we can receive more information more quickly hence the rise of incoming money. Yes the market cap rises and decreases. Again, look long term. There are certain low points that you just never see again. Secondly, this is going to cause some leap frogging in technology. Just as third world countries never adopted landlines because cell phones were easier to implement, a lot of third world countries are never going to adopt traditional banking systems and go directly to block-chain and crypto-currency. When that happens, it will be the equivalent of a double injection of capital into crypto-currency. First the institutions of the developed world and then secondly the rest of the world.
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