Hello and welcome to my Medium.
Before I post anything else here I want to give you a quick rundown of who I am and what I am interested in, what my daily activities are and what my general goal in life is.
I am a 21 year old student from Belgium, currently studying economics in college and electrical engineering in evening class.
Aside from that, I am an autodidact and prefer to learn by myself.
I feel as if the knowledge presented at school is a good base layer but often outdated. I am not interested in taking any tech related classes at the university for that very reason. Absorbing the basic knowledge and coming to my own conclusions about current events in the technological sector is also far more rewarding than being spoon fed books of information but being none the wiser in the end. Experience over theory.
What was your introduction to crypto assets?
My first crypto investment (read: gamble) was in may 2016. I had no idea what crypto assets were but news about Monero somehow got onto my radar and I decided to take the gamble. As far as I knew at that point, crypto assets were highly volatile and things could go both ways. I was intrigued enough to invest (bet) a small amount of my holdings. My technical understanding at this point was limited, but sufficient enough to secure my assets in a personal wallet.
Fast forward a few months to the end of 2016.
I didn’t really pay attention to crypto anymore and checked my holdings sporadically. Only at the end of the year I was pleasantly surprised to see that my initial investment had pulled a 10x.
I was in awe, is this real? I had read a few articles about crypto millionaires but it always felt very distant and surreal. Here I was, sitting on a 10x after just half a year.
I decided to investigate further into the potential of crypto assets.
I watched Andreas Antonopoulos’ videos, read the Bitcoin whitepaper, starting discussing it with my friends, joined a plethora of crypto related forums and generally tried to absorb as much information as possible.
A few months passed by and Ethereum caught my attention.
Plenty of people on a Belgian forum were speculating about it and after reviewing it myself I decided to take the leap and diversify half of my Monero holdings to Ether in Q1 2017.
A very nice decision, a few months later my investment had resulted in a winning once again. Monero was pretty stagnant, but also performing reasonably well. I decided to roll over half of my Ether winnings around the $130 mark into NEO and BTC.
At this point things started to go crazy in May 2017 and my entire portfolio blew up again. It was nice, but I learned a hard lesson in July 2017. My entire portfolio tanked with 70% and I had just experienced my first big dump. You will read about people who experienced the same thing but your emotional bias (read: greed) will ignore the obvious, until you make the same mistake as them.
Lesson learned: unrealized profit is not profit.
It’s very easy when you put it that way, isn’t it? At this stage I started to wonder if I was in fact knowledgeable in this field or just one of the lucky few to have joined crypto in a relatively early stage. I came to the conclusion that I had no idea how markets operated and that my previous investments (read: gambles) were made on the assumption of the coins being worthwhile because of the huge confirmation bias in the markets.
Somewhere down the road it turned from a gamble into an investment. From inexperienced to intellectually arrogant (but still, mostly inexperienced).
I took myself for a walk. I was subconsciously and consciously under the impression that because I was making a profit, I was right.
Guess what, I was wrong. I wasn’t right. I was being influenced by all of the confirmation bias posts and articles on the plethora of forums I joined and I was simply investing in what they considered valuable.
Once you realize this: something changes.
At this point it is still the July 2017 bear market.
Good, now that I made this realization I can now make a decision of my own right?
And so I did, I started researching for myself, actually reviewing and categorizing projects based on what I considered a valuable project. At this stage I decided I would leave 50% in Ether because of my own research (even though it was spoon fed to me before) and diversify into a few other coins.
Fast forward to the big bull run of 2017 where Ethereum showed it’s strength along with the ICO boom: it was amazing and because of my previous mistake I decided to cash out 50% in december, leaving another 50% actively in the market.
At this point most of my investments netted me a profit, but nothing came close to the return of Ether. I started to wonder if my research actually mattered. To be honest, I don’t think it did. Ether had a pre-existing confirmation bias in the market that it was valuable, so it became valuable over time. Yet I agreed with the technical side and decided to leave 50% in.
What conclusion did I make from this matter in January?
Well, the harsh reality is that the entire market runs on assumptions and confirmation bias and that my own research does not matter. If 200 people say something is good and it is valuable, it will be valuable. Even though it is not worthy of being valuable because of technical or fundamental reasons, it is no longer relevant.
A perfect example of confirmation bias in the markets are Verge and Tron.
But those are the ones that stick out like a sore thumb. Those are the ones with no fundamental value because of 51% hacks, code exploits, copy-pasted whitepapers and crooked team members. But as you can see: it doesn’t even matter.
The same goes for Ethereum, and I will phrase this carefully because I don’t want to give you the impression that it is a bad project (I really did research and like it). It actually has use, it’s actually capable of doing things and it was a technological advancement. But to value it at the price it currently has? (Or had in january?) That’s absolutely ridiculous and the current bear market is of no surprise.
I am not the only one who had the similar impression.
What we’re currently experiencing is the market trying to find a fair valuation. Nothing more, nothing less. 2017 was over the top. I am certain we will see unfair valuation of projects in the future. There will be hype, ups and downs, but the market will return to its medium and return to its equilibrium.
Altogether, the new money in the market is giving businesses the opportunity to explore new paths, fund ideas and for scammers to take a cut.
There will be a new Ethereum, and it will be funded by the success of its predecessors leading to infinite technological advancement in the space.
What are your plans?
I already established earlier that projects are valued because of confirmation bias, but also through innovation.
I plan to follow the confirmation bias using private sentiment analysis techniques (even though the projects are trash). I plan on following the money and the herd.
You might’ve heard of the sentence: ‘The customer is always right’.
Wikipedia tell you: ‘a motto or slogan which exhorts service staff to give a high priority to customer satisfaction.’
That is not what ‘The customer is always right’ means for me.
Let’s make a simple example here:
The seller wants to sell purple apples because he likes them and because he wants the world to consume purple apples.
The customers however are not interested in his purple apple (the reason does not matter), but are instead interested in red apples.
In this sense, the customer is right: therefore the seller needs to sell red apples. Even if the seller is right about selling purple apples. It does not matter, the customer is right. The customer is right about wanting the red apple.
You probably see where I am going with this, this is what I will apply to the crypto market.
30% will be me buying coins/tokens based on the sentiment regardless of marketcap
30% will be me buying coins/tokens based on what could generate a sentiment because of various reasons
30% will be random picks based on name, wallet-friendliness, accumulation volume and more
That’s all there is to it. Like the customer who is right, the market is also right.
It doesn’t matter that the seller (you) wants to sell purple apples (your fav shitcoin), if the customer (market) wants red apples (the shitcoin you hate) you will sell (invest) red apples (in the shitcoin).
I hope this first blog post was enjoyable. I did not proofread it and the cohesion of it might not be a 10/10.
Do you like my history and my approach? Please share this blog post with your friends.
Until next time :)
Snipe
