The Awakening 2

I wrote at the end of my post The Awakening that I will post Awakening 2 when the crypto market crashes. Lo and behold, I have to put up this post sooner than I thought (it's been like less than 3 weeks?!). 

I hope my Awakening post didn't cause anyone to chase the ATH. Ouch! (Wait, first let me dig out my blog disclaimer as shield.)


This post of Awakening 2 is an awakening lesson for those, including myself, who belittled the volatility of crypto. At the time of writing, about half of my paper profits have been wiped out by bitcoin and the altcoins crashes. I have myself to blame for accumulating some altcoins just very recently, almost at their ATH to dabble in some Defi stuff. Yes, and a very stupid mistake of swapping some of my ETH to BTC when ETH was pumping last month.


Below is the grand chart of BTC's grand fall. 
(Steep enough for a bungee jump!)


Bitcoin USD chart May 2021
Source: Tradingview


The Ethereum grand fall that mirrors.

Source: Tradingview


So what's going to happen now?

Frankly speaking, I don't know.


I shall sit and wait to for all the FUD to fully unfold, then observe the price actions next week. Eyes on the big players and China.


I am not going to try and catch a falling knife, not going to leverage anything, nor short the market. I am not selling either. I am just sitting on my hands for now. I think that the market will slowly pump again once the FUD is over.

---

Is this the Modern Day Tulips?




I do not think so. 

Why?

1) Blockchain is becoming an indispensable new technology in our modern world. It has been 5 years since this interview and nothing has fundamentally changed. Blockchain technology will continue to revolutionize the financial system, bringing with it the power of greater transparency and accountability in the new economies. 

Now I understood the meaning of "trustless".


2) Too much has already been invested in the crypto space, I am not talking about only monetary investment. It has grown so much that it's now way beyond retail speculation. (Did I hear you say institution speculation?). 


And this is not Tulips in Holland. (I think it is more of roses, daisies, peonies, lilies and sakura all around the world.)


Perhaps the rise of Dogecoin was a fluke puzzling meme (it is still surviving the crash though). Danger lurks in the Defi space with scams and rug-pull projects abound. However, for the tokens that managed to carve their niche and acquire increasing market capitalization, they are often results of well-constructed projects that offer their users value and high utility interest.


That said, now crypto is still far from mainstream adoption, unlike the Internet and Smart phones, which stemmed from regulatory and risk concerns. Perhaps, one day, we will live by smart contract just like how we live by smart phones.


Don't forget "Hopium" - I believe if we trust enough in network effect, it can happen.



The danger - Leverage and Greed


When too many people hanker after quick profits or jump into the FOMO bandwagon, we will see cases of over-leveraging and an over-heated market.


High leveraging x High Volatility asset = Disaster


When people get liquidated or capitulated, prices plunged. We then see a downward spiral perpetuated by further liquidations and capitulations.

Don't say I never warn you.


Now back to asking myself - why didn't I sell when I sensed an ATH in April? Darn... 

😭


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Comments

  1. Not applicable to buy slowly and sell slowly in BTC?

    ReplyDelete
    Replies
    1. Hi Uncle8888,

      Buying slowly is easy, but selling fast enough when dip comes is hard.

      Delete
  2. Rainbow girl,

    LOL!

    I'm taking it as an intellectual challenge to myself too!

    Let's see in 10 years time ;)

    Remember in 2000 during the dotcom boom? The internet is like blockchain. But most IPOs and startups that tried to ride on the internet are merely "tulips". Only a few survived to be big today.

    Oh! I believe in blockchain. So do governments. I believe in human nature and what politicians will do.

    US Fed has announced they will introduce Central Bank Digital Currency - CBDC.

    If US can confiscate gold in the past, I wouldn't hold my breath to bet against US not following China's recent footsteps...

    One day most countries and governments (even Singapore) with have digital currencies based on blockchain technology.

    Cryptos?

    They are like Hello Kitty collectibles. If someone want to pay $100K for a tulip... What's wrong? Willing buyer, willing seller ;)

    Its a bit like buying Art or Antique - its only "valuable" to those into it.

    ReplyDelete
    Replies
    1. Hi SMOL,

      My crypto space above refers to Defi (Decentralized Finance) space - the "bo zheng hu" space.

      Digital currencies issued by "zheng hu" is Cefi.


      Can "zheng hu" control the Defi space? Even if they ban BTC, there will be another "BTC" that rise from elsewhere to take over the role of "currency" in Defi.


      I don't mind keeping Hello kitties or antiques, as long as they don't wilt like the real tulips. :P

      Delete
    2. When people bring their money from cloud back to earth (eg. Defi to Cefi), zheng hu can tax them. Good right?

      If so, zheng hu should hope for its citizens to make more money from the cloud haha. Theoretically speaking.

      Delete
    3. Big daddy has oredi protected its backside:

      MAS position on cryptos

      When retail investors go hong lim park cry father cry mother, big daddy can say, "We warned you. We tried educating you... You don't listen. What can we do?"

      And if zheng hu can tax crypto profits, how is this "anonymous" anymore?

      Paying in cash would be better if we don't want anyone knowing what we bought or sold; or how much we made ;)

      That's why most zheng hus of the world are prioritising removing cash transactions first.

      First things first ;)


      Delete
    4. Hi SMOL,

      Can be anonymous. The backdoor cash upfront way.

      Unless cash has become obsolete then. Oh ya and must bring body guards to prevent a kidnap! lol

      Delete

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