Hey, let's short Bitcoin!
The Peanut Gallery: NOOOOO! HODL!!!!
Let's short Litecoin!
The Chuck Lee Farm: Uhmm...If you believe, HODL!
Let's short Ethereum!
The Platform Lovin' Fanatics: Don't be a Fool. The Flippening is coming! HODL!
Let's short NEO!
The True Believers: You're Nuts, NEO to the Moon!
Let's short Tether!
The clueless: Are you kidding? It'll reach $2 soon!
Let's short BitConnect!
The Next Wave: No way, new BitconnectX coin coming. It will blow the doors off your BCC holdings!
Y'all get the point, yet? Apparently, we can't talk about alternatives to HODL without inciting mass hysteria. All too often, good ideas expressed publicly get squashed quickly and viciously by the general Crypto Community with "HODL" mantra. I want to talk about HODL mentality today because I'm tired of seeing it blasted everywhere and anywhere someone tries to raise a real discussion about doing selling a position with intent to buy it back at a lower price.
I used to HODL like all the rest until one day, I did the math and realized I was losing so much money by sitting still in any one crypto currency for too long. Let me show you with real charts with Bitcoin's performance in bright green line mapped against various coins.
Everyone knows Bitcoin's story. Currently in a bearish trend it can't seem to snap out of. If for the last three months you've just been sitting still waiting while the market corrects, then you may be in for an awakening as to why staying active in trading is your best option.
NOTE: I am not a professional. This isn't financial advice for buying or selling. Hopefully, you'll nevertheless find this highly educational. Consult a professional financial advisor and trade at your own risk! Y'all know the drill by now.
First up, let's discuss NANO. This was once RaiBlocks and was rebranded recently as well as getting listed on Binance. It had a great run. If you bought it right after it was listed on Binance, this is how your performance would stack up against Bitcoin's in that time period:
Bitcoin (bright green line) wins by virtue of coming out on top in the ensuing period. So clearly, buying early and HODL didn't work for NANO here. If, on the otherhand, you waited patiently for NANO to drop, then bought anywhere within 30% of it's bottom (as shown here), a HODL strategy from there to today would've beaten Bitcoin:
But that's not really your best strategy either. A better strategy, buy NANO near the bottom and sell near it's top and hold Bitcoin in the interim would work out better because you're now holding more Bitcoin. However, that's not the end of the game. You can still do better. Notice how Bitcoin peaked not too long after and started back down to it's bear downtrend channel...that was an opportunity!
What opportunity? Well, there were many, but one that stands out and was very palatable at the time was to move funds into Litecoin because it was trading sideways and was forming an inverse head and shoulder that indicated it was about to go on a bull tear. It's chart looked like this:
So your money continues to work for you in a generally bearish market and you're now up even move Bitcoin if you sold Litecoin soon after it peaked (which is what I did). About this time, the market is looking cloudy all around, Bitcoin is starting to face resistance and not cracking the neckline of a massive inverse heads and shoulder pattern that had been forming. So there's no real winners showing themselves except one: Getting out or popping over to a stable coin like Tether (USDT). I have been a long time avoider of this coin, but BitMEX's in-depth research on this coin coupled with Bitfinex's strong standing amongst all exchanges convinces me it's not crumbling tomorrow, so for a brief time, I swapped Bitcoin for Tether and let Bitcoin take it's fall.
Then I noticed something after Maker/Dai made the announcement that they're partnering to add DGD (DigitxDAO) as a collateral option to supplement ETH. When I started researching this coin, I learned it's pegged to gold bullion. So I saw an opportunity here as well, DGD hasn't taken off yet, so I moved my Tether to DGD. And that brings us to the final chart of this series:
DGD exploded shortly after I bought in! I am out now as it's starting to trend sideways and sitting in Bitcoin. The good news for me is my overall Satoshi stack is UP during these past three months far more than if I just sat and HODL.
It's challenging for sure to learn to make these trades and this is my first time navigating a bear market, so I have made some mistakes along the way, like holding NANO too long (I only sold half my position at the sell point mentioned above) and holding NEO through it's bad press news recently before abandoning the sinking ship around $119. But that's ok, because every day, I'm learning from mistakes as well as successes and becoming a better trader overall.
One last point I shall make about HODL strategy and why you might want to rethink a dogmatic position on HODL and nothing else: We're in an era of cryptocurrencies that is likened to 1996 to 1999 dot com era right before "the bust." 99% of all Internet companies went belly up in the next three years. Those that survived were decimated value-wise, but they did eventually go on to be hugely successful and make their early adopter shareholders quite wealthy.
The same sort of crash or bubble is coming for cryptos. The problem is, which 1% will survive? Simply put: We don't know! But I do know one thing. I do not want 99% of my investments to evaporate simply because I HODL into the ground. I would much, much rather learn right now today how to actively manage my portfolio to reduce risk, to reduce cost of ownership of coins and be constantly striving to boost my Satoshi stack. Learning now puts me in a far, far better position to navigate a watershed moment in crypto's upcoming future.
Great read, I loved the beginning 😂
Thanks...apparently I'm bringing people over to the darkside according to @rhlll :-D
Wa'ah'ah!!
Finally a green day. G20 had a positive talk.
I'm totally broke. Crypto turned out to be nothing more but glorified casino.
I hope you recover bro. Just hold, and everything will be fine.
🙏🙏
Totally off topic: Nice pictures on your blog in Thai. I'm looking forward to my first-ever trip there in a few months!
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STOPThat's the irony of managing a portfolio mainly constituted with altcoins. Actively managing such portfolio is extremely difficult because of the uncertainty of this nascent market. In this case, most people would make more money by passively managing their portfolio due to volatility. However, we're not sure if there's going to be a future for most of these projects.
The best strategy would be to reduce your risk exposure by avoiding the markets for now unless you have the expertise to strive with the ups and downs. Personally, I would wait until all government regulations are announced before investing more.
I visited the dark side, and I'm not HODLing as much as before.
It's hard to tell if people just yell hodl, but sell in secrecy. If they were honest, sentiment on social media would reflect price action. We all know that's not the case. Every price drop is just assigned "fud" label, and every increase is expected, natural and permanent.
HODLing is a bit like people pretending to attend church lol.
Exactly. Such a bipolar environment. Fanaticism and devotion, cults and tribalism. It's hard to make any sense from it.
I don't trust anything people say online. I would even dare to say there is negative correlation between their statements and what really happens.
I relied on it a while ago, but I stopped trusting online sources years ago. I mean, it's a great plan for starting to investigate... but often barely more than an outline. When emotions and manipulation is mixed to it, RUN as fast as you can.