Knocking out the bear

tarazkp (85)in LeoFinance • 4 years ago (edited)

As normal, I have got a couple more messages from people who are a bit concerned by all the candles burning red in their portfolios the last day or two and I can feel the thinly-veiled panic building. I asked a couple of my regulars how they felt and this quote sums up the general sentiment;

I don't get fussed too much by the dips anymore. The bear knocked that out of me.

Seasoned professionals.

It can be hard of course when thinking about that gap between the value before and the value after a dippening event, but I no longer get that pit in my stomach like I did once upon a time. The first large dip I experienced was back in 2017 and a couple months after I first started trading. I had 1900 dollars worth of crypto in total and in a couple hours, I lost about 600 of it. I was at the summer place with my wife and rather than enjoying myself with family, the knot in my core drew all of my attention to the point I felt sick. Obviously, that isn't healthy, but at the time, my family was struggling so much financially and physically, that kind of "loss" mattered.

Of course like anyone, I don't want to lose any value, but I know that it isn't a loss until it is realized at the point of sale and the dips like the last days are blips on the path up. Not only that, what has actually been lost is a few days of gains, with many of the tokens returning to point about a week ago. Hmm - that isn't too bad really.

People have strange memories and emotional reactions.

The price of Bitcoin today was the same as about two weeks ago and four weeks ago and it was literally only ten days ago that it hit its highest ever price on record. Yet, people respond to the loss as if the world is over. Of course, "when in doubt, zoom out" comes into play too.

The x is the start of 2021, because looking back to the start of 2020 just looks silly.

And to the last ATH in 2017, even more ridiculous.

But at least in the last graph, you can see why the "bear years" between then and now knocked the fuss of dips out of many of the holders. Do those who sold at the peaks have a different feeling at the dips?

That might be interesting to think about, because I have noticed a lot of returnees who haven't been around much the last three years coming back with little to no stake. Of course, they might have sold at the peaks, held for 18 months and bought bitcoin at the lows and be living large, but if they did -buying a little Hive stake would hardly make a dent in their holdings. I suspect most didn't do that though, as generally going to fiat will bleed value into fiat things.

It is because of this I think the next bear is going to be quite different, because rather than going to fiat, people will go to stables and that will hold the value in crypto, keeping the market cap high, even if it drains out of Bitcoin and Ethereum. A lot of that value will park itself as stables in farming pools, waiting for the time to get back in. The crypto scene has changed markedly in the last four years - a lot of experienced people are going to get caught out if they think it is going to be a carbon-copy of the last bears.

But, we aren't ready to grin and bear it yet, we are just kicking this season off and I think that the last few weeks have been the first volley into alt season, but not the largest by far. But, because people get impatient and try and chase fast large gains, they will move in and out of tokens, taking losses all over the place, looking for the "forever score" the big one. Those with a little more presence of mind, will know that in the long run, the tortoise beats the hare.

But, it really isn't about beating anyone, is it? Though by the way people speak it is as if there is a competition between the hodlers and the sodlers, but it isn't actually the case, at least at the macro level. Hodlers are able to be so because they have created a personal environment that allows them to do so - they can afford to hold. While they might miss out on massive gains, they also don't bleed value into life and because they take care of their finances, they can likely keep adding over time to their position. While not exclusively so, it could very well be that the people who didn't sell could do so because they weren't desperate enough that they had to, that they had enough to pay their bills and live their life without the additional income.

I wonder, how many people that sold in 2017/18 are better off now than they were then, and how many are in a position where not much has changed?

I held.

Not much has changed for me. But if I were to sell everything today, it would put me in a fundamentally better position now and several magnitudes better than back then at the peaks four years ago. While I have added to my investments through adding funds and working on Hive for all of that time, the biggest factor is that IRL, I made sure that I survived without using any of the crypto I earned. This was a lot of work to manage, but I am near certain that if I had sold and then tried to build back up, I wouldn't be in the position I am today, as it is much easier to get out than it is to get back into the pool.

I want to stay in the pool and thankfully, the new crypto tools at our disposal allow for just that. I am hoping that I won't have to sell any of the principal and instead, can use what I have to invest into pools and projects for a return. I hope to be able to do this because if this bull plays out as it could, with very little of my holdings I will be able to make that fundamental change to my economic position, and not need any more of it to fund my lifestyle. After all, I want to make sure I hold enough in the future, because the next bullrun is only 4 years away.

The next bear won't knock anything out of me.

Taraz
[ Gen1: Hive ]