The Awakening 2

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

I hope my Awakening post didn't cause anyone to chase the ATH. (Let me dig out and flash my blog disclaimer as a shield.)

This post of Awakening 2 is an awakening lesson for all 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 bungee jump!)

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.

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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 would then see a downward spiral perpetuated by further liquidations and capitulations.

Don't say I didn't warn.

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

Darn. 

😭

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Disclaimer: Contents of this blog are personal opinions and NOT financial advice to buy or sell any mentioned securities, commodities or assets.