Autumn Hype Cycle
First of all, I'm not a pro trader, I only got into trading cryptocurrencies earlier this summer in the last hype cycle, this is purely for personal speculative purposes and out-loud observations so I can be proven wrong in the future.
It's funny how this current hype cycle began, Altcoin traders started dumping their coins into BTC about a month ago to get in on this upcoming fork, and because so many people made a move at the same time around middle of October, it jumped from $4200-5700 in a matter of 10 days. What happened is that triggered a price event which caught headlines, and the media has been having a field day with it.
That new wave of Bitcoin in the media is bringing on a whole new wave of crypto newbies (just like me a few months ago), with Coinbase signing up 100K new users in one day, who are buying at these crazy volatile levels. People heard a fork is coming, though nobody can explain what a fork actually is, it's just free money, isn't it? And so confusion is accepted as the norm, and people just keep buying on headlines that one Bitcoin will eventually be worth a billion dollars. I actually read that in a headline, one billion dollars for a Bitcoin, some people believe that.
In the last few weeks, looking at the volume spikes, you can see some big whales in the pool who are making an absolute killing on these price pumps, and those whales are smart cookies. The average whale could own 1,000-100,000x more than the average Bitcoin owner, and they're often playing with other people's money, who need to see a hard return in fiat. A lot of this new money is not people who 'believe' in Bitcoin as the future of currency necessarily, though they are smart enough to see a hype cycle and know how to extract massive profits from uneducated first time buyers.
With Segwit 2x futures peaking at only 33% of the price of Bitcoin, and this last bull run seeing an over 100% gain, just do the math, a whole lot of people are going to loose a lot of money after this fork happens, and the whale traders are going to have very very nice fourth quarter reports to take home for Christmas.
Honestly, look around, people are primarily gaming Bitcoin to make money right now, which is an important network effect for the overall ecology, though in my opinion is not the original spirit of the technology. The culture is being over-run by speculators who fill up blocks with quick turn-around trades. With Segwit 2x fork lacking re with billions in newbie money coming in, I can see this being a recipe for disaster. No way around it, a whole lot of people are going to loose a whole lot of money on Bitcoin in the coming weeks. The loss will be in the magnitude of tens of billions of dollars.
Money will be lost through replay attacks, people sending funds to the wrong networks, and a general price collapse.
The FOMO traders are in it for a quick buck, they're not in it for the long game, so when it crashes again, human nature is to buy high and sell low. Every trader knows that the opposite thinking is the only way to make money, so I can see a pretty harsh hangover coming up right after this fork. That said, we're in crazy new territory here, and I'm glad we're finally getting an alternative to fiat, although I would like to see crypto adopted more widely as an actual payment method where goods and services are being exchanged, rather than just the price speculated on. These hype cycles don't exactly facilitate my ideal use case for cryptos.
Those are my thoughts on Bitcoin today, and one thing I've learned is that Bitcoin doesn't care at all what I think, it's a wild beast that has it's own way with things. Happy trading guys, I'm selling a portion of my Bitcoin now for Litecoin and other alts with hopes of advancing my position in BTC after this fork. #hypocrite #famouslastwords #thisisnotinvestmentadvice #hodlordie
It's funny how this current hype cycle began, Altcoin traders started dumping their coins into BTC about a month ago to get in on this upcoming fork, and because so many people made a move at the same time around middle of October, it jumped from $4200-5700 in a matter of 10 days. What happened is that triggered a price event which caught headlines, and the media has been having a field day with it.
That new wave of Bitcoin in the media is bringing on a whole new wave of crypto newbies (just like me a few months ago), with Coinbase signing up 100K new users in one day, who are buying at these crazy volatile levels. People heard a fork is coming, though nobody can explain what a fork actually is, it's just free money, isn't it? And so confusion is accepted as the norm, and people just keep buying on headlines that one Bitcoin will eventually be worth a billion dollars. I actually read that in a headline, one billion dollars for a Bitcoin, some people believe that.
In the last few weeks, looking at the volume spikes, you can see some big whales in the pool who are making an absolute killing on these price pumps, and those whales are smart cookies. The average whale could own 1,000-100,000x more than the average Bitcoin owner, and they're often playing with other people's money, who need to see a hard return in fiat. A lot of this new money is not people who 'believe' in Bitcoin as the future of currency necessarily, though they are smart enough to see a hype cycle and know how to extract massive profits from uneducated first time buyers.
With Segwit 2x futures peaking at only 33% of the price of Bitcoin, and this last bull run seeing an over 100% gain, just do the math, a whole lot of people are going to loose a lot of money after this fork happens, and the whale traders are going to have very very nice fourth quarter reports to take home for Christmas.
Honestly, look around, people are primarily gaming Bitcoin to make money right now, which is an important network effect for the overall ecology, though in my opinion is not the original spirit of the technology. The culture is being over-run by speculators who fill up blocks with quick turn-around trades. With Segwit 2x fork lacking re with billions in newbie money coming in, I can see this being a recipe for disaster. No way around it, a whole lot of people are going to loose a whole lot of money on Bitcoin in the coming weeks. The loss will be in the magnitude of tens of billions of dollars.
Money will be lost through replay attacks, people sending funds to the wrong networks, and a general price collapse.
The FOMO traders are in it for a quick buck, they're not in it for the long game, so when it crashes again, human nature is to buy high and sell low. Every trader knows that the opposite thinking is the only way to make money, so I can see a pretty harsh hangover coming up right after this fork. That said, we're in crazy new territory here, and I'm glad we're finally getting an alternative to fiat, although I would like to see crypto adopted more widely as an actual payment method where goods and services are being exchanged, rather than just the price speculated on. These hype cycles don't exactly facilitate my ideal use case for cryptos.
Those are my thoughts on Bitcoin today, and one thing I've learned is that Bitcoin doesn't care at all what I think, it's a wild beast that has it's own way with things. Happy trading guys, I'm selling a portion of my Bitcoin now for Litecoin and other alts with hopes of advancing my position in BTC after this fork. #hypocrite #famouslastwords #thisisnotinvestmentadvice #hodlordie
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