The world of cryptocurrencies you’ve never known before — facts, opinions and thoughts after 4 years in the field
I’m NOT an expert. I’ve NEVER considered myself as one. Nevertheless, throughout the last 4 years I’ve been sharing my thoughts, helping and advising hundreds of people, not earning a dime on it. This article is a direct result of these conversations. The essence of the knowledge laid out in the simplest form possible. It’ll be controversial, bold and it’s almost certain you won’t like some of the ideas presented. Let’s begin, shall we?
HODL as the most effective strategy in the cryptocurrency market. Is that so?
How many times have you been told not to worry and hold your positions? It’s 80% down, but keep it cool and hold, it will bounce back… it always does. That’s a nonsense and the biggest lie you’ll ever hear. Most of the projects in the market are dummies, while the proper place for project verification is Github. If you’ve never heard of it, you need to catch up (and better be quick). If you know it but don’t use it — bookmark it right away.
I guess you’re familiar with Reddcoin. Wanna hear a fun fact? In 2017, after a year (or more) long hiatus, they suddenly became active on Github again. The project was dead, forgotten and all of a sudden came back to life as the market became rich with optimism, money and lots of knuckleheads believing every single marketing lie.
On the contrary, I know people selling out ETHEREUM after the first major peak at $22, feeling on top of the world. The strategy was simple: sell high, buy low. And you know what? They sold high, but they never had a chance to buy low again. That leads us to another point:
NEVER look for peaks and troughs
During the last year I’ve committed this mistake three times. You could say it cost me millions, on the other hand are missed opportunities really a loss? In my opinion, they’re NOT, but let’s get to the point. I’ve observed how OmiseGO, after a week-long fundamental analysis (where I got everything right), ran from the $0.4 level to $10 in less than 2 months. Next was EOS (went from $0.6 to $20), which I was so sure of that I went on a mission telling left and right how much I believe everybody should invest in it. And the crème de la crème of them: ONT. The project I’ve set up several reminders for, resulted in an 800% loss in a month.
What do these histories have in common? Good fundamental analysis, but also: staying reckless and greedy. Each of these projects had my buy orders set around 10–20% too low. Lesson learned? If it’s cheap, buy gradually and never look for troughs.
Don’t trade if you know nothing about it
I know a story of a guy with zero experience in trading, who having bought a coin, decided to multiply it the moment it went live on Poloniex with the simplest of strategies: “sell high, buy low”. In the beginning he got away with it a couple of times. His confidence boosted and his faith in an innate talent in market prognosis increased. Then he went on a losing spree and was down by 90%. If he stayed still, he’d likely have $5 mln in his pocket by now, a few years more to live and two working laptop mice he destroyed after trades with no stop-loss.
Are you aware you’re investing in “cookie coins”?
Those who know me well know how much I talk about the fact that most of the coins we keep in our blockfolios are dummies with their overall capitalization overestimated by something like 99%. Take a pessimistic look at the market and think for a moment what a project valuation really is. Is our national Golem project valued at $200 mln (and $1 bln in the peak)? NO! It’s a valuation of all the coins that are circulating in the market. And what do these coins stand for? Will they allow you to pay dividends from the company? Answer this one question:
WHAT should the real value of coins be, if their sole purpose is basically nothing, since the project doesn’t work yet?
The total project valuation is more important than the unit price, but you know what… the sheep don’t give a shit
Have you noticed that the biggest pump was observed with the coins with a low unit price point? TRON, VERGE, SIACOIN etc. I’ve spent a lot of time looking for the reason behind it and I think I’ve finally found one. The market is governed by a stupid, simplistic way of thinking. If I buy something for $0.01 then I may as well get 10,000 units of it for $100 bucks and quickly jump to conclusions what would happen the moment the unit price goes to $1. Easy, simple vision. The majority in the market don’t think. That’s why you should leverage it. What are your thoughts on HOT available on Binance with a very low unit price? I bet that once the optimistic mood returns to the market, we’ll observe a nice pump that we’ll talk about for a long, long time.
The market is irrational
If you take a look at my earlier articles you’ll notice that my market analysis was based on raw, fundamental, positive information that initially had a saying in a slight increase around May, but in the end didn’t result in the trend reversing. NEVER before have I analyzed so many positive news than in the last 6 months, after which most of the valuations fell down by a whopping 90%.
Follow the big money
Projects that are backed at the early stages by huge VCs or angel investors will sooner or later let you earn plenty. One example of a project that went live (with bad timing, though) is Tezos. There are big names behind it, a significant capital ready to be pumped into the coin solely to distract and make a bit of mess around — a similar situation to EOS and TRX.
ICO 2.0 is the future, but it’s the next bubble, too
ICO in 2017 was a boom you can’t simply compare to anything else. Panically investing in shitcoin projects with no value solely on the premise that “everything profits”. This point is directly related to cookie coins mentioned earlier. I think that the cryptocurrency community gets smarter and it won’t be long before the above won’t be possible anymore. We come to the times of real value projects, regulations and tokenizing innovative companies that have a real chance of making the world a better place. ICO 2.0/ETO is the next bubble that will grow even larger.
Be ready for that!
Do you want big profits? DON’T THINK and follow the trend
I’ll be frank, I have a problem with that. I didn’t profit on Verge and TRX just because I didn’t see any value in these projects. What I saw instead was a progressive HYPE which came to a boiling point. I mention this knowing that most likely I’ll never be able to make decisions based solely on HYPE itself, but maybe you will? To my mind, spotting trends can yield profits that even the best of fundamental analysis cannot. Sad, but true.
Be patient — easier said than done
Wait, HODL and don’t check your Blockfolio, when each day the numbers indicate you’ve just lost a car-, house- or holiday-worth of money. If you stay equanimous at those moments then:
a. you have your back covered and most likely you’ve built a solid financial safety net
b. you don’t use your own money
c. you’re lobotomized
I hope it’s “A” for you. If this is so then the only thing I would recommend you to consider is if your portfolio consists of projects with real value and a good team that keep going at a steady tempo regardless of the sluggish, bear market.
During my absence I’ve received a lot of questions why I’m not posting regularly. The answer is simple: I don’t want to. If I have something to say, I sit down and have an article finished within an hour. I rely on flow for this. I don’t want to open my laptop and start wondering what I should write about, it kills me. Remember you may always reach me via PMs, I’ll help as much as I can. Let me know how frustrated are you with the current market situation, what your feelings are and what you’ve learned during the last 8 months. And remember: ”EVERYBODY’S AN EXPERT ON THE BULL MARKET”
~#Jarzombek
The Birb Nest is a facet of the CryptoBirb community. For more information please visit https://discord.gg/kUpraEH
