There is a strange little investment "quirk" in comparing traditional and crypto, where the people who have holdings in both, tend to spend far more time on the crypto side, even if it is a minor percentage of their total portfolio. I asked a friend who is in this position currently as to why this might be, and he gave the answer that it is "sexier" (more hype) and more exciting than his traditional investment.
But digging a bit deeper, I mentioned a couple factors that I think are also present in the majority of people. Firstly, the investment into crypto isn't a "black box" like how most people invest traditionally, meaning that they make the decisions to get in, move, buy, sell, hold etc by themselves. And, because of this, the experience becomes gamified, making it more interesting, more addictive and because crypto never sleeps, always "on demand".
That last one is a big factor that many overlook, because while the traditional markets are closed, people are always trading crypto - there are no quiet times, no weekends off. 24/7 - the skin is in the game, active and there are always decisions to be made.
But there is another factor as well that heavily affects people's time investment...
Expectation.
There is an "unrealistic" expectation when it comes to investing into crypto, where someone can invest 50K into traditional stocks and "set and forget" about it, assuming it will manage itself and provide some kind of stead return. But the same person puts 1K into Bitcoin and expects it to buy them a luxury car 6 months down the track. People seem to get caught up in the hype of various tokens and the stories they read in the mainstream media, expecting that this kind of turn around is common, even though they do next to no research into what is behind those stories in the first place. And, rather than researching why crypto is important, they buy some tokens and then sit there, looking at the value of their holdings on whatever exchange they happen to be using.
It is an interesting mental position, but it is aligned with culture these days, where people are relatively short-sighted in what they think is a "long term" investment and, they are more interested in being entertained, than diving in and learning what lays beneath the surface. It is like buying a jersey, watching the team play and feeling that somehow, you are deserving of the success of your team. And when they lose, it was someone else's fault.
If markets are driven by sentiment, culture has to be considered as an influencing factor, because people make their decisions based on their beliefs, regardless of whether what they believe is accurate or not. And, because of the polarization of arguments, there is far more "in or out" than there was prior, people don't seem to take middle ground positions and I think this shines into investment strategy too. We want to believe that we are right, so we will act accordingly - that we are right.
Market sentiment.
This works up and down of course, and because there is so much expectation of volatility in crypto, the +30% 24h swings are acceptable - it is just the way it works. And, all of this feeds back into that gamification loop, making it exciting, emotional, a rollercoaster ride, a thriller finish - the most heart-wrenching story ever heard.
People FEEL crypto.
And in a world where relationships are falling apart and intimacy are waning in a world of increasing disconnection, isolation and the sense of grey inevitability - crypto bubbles the emotion to the surface and makes people feel like, it is possible afterall.
And when you have hope - you will keep watching in anticipation.
Taraz
[ Gen1: Hive ]
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I tend to see large swings, both up and down as opportunity, or if I may, a "delta strategy".
Once you realize that any asset can lose 10% a day, every day to eternity, it starts to make more sense. Coin at 100 minus 10%, now 90 minus 10%, now 81... to infinity.
If you invest using this delta strategy, you can, even with any fixed amount, buy infinitely and sell infinitely. And oddly, you celebrate every single move, the larger the better.
Of course without knowing what you're buying, negates the value of any strategy.
I do this, not to get rich, or claim I have any special technique, insight or skill. I just love overlaying philosophy, maths and such, on top, as a curious exercise.. it's intriguing.
In philosophy I was exposed to the idea: If you can always go half way to your destination, then from that half way point, go another half way, and from there another half way. Then, in philosophical terms, one could prove you can never reach your destination, or any destination. Don't remember the philosopher that proposed this, as it's been a very long time, but.. hmmm, interesting.
And math... Y axis price levels that are linear... bahhhh.... at least try logarithmic, then change your indicators logarithmic.. getting there..
Now quick, think, Why does a mirror flip your image left to right, but not up to down? This has an answer, but that's not the point. It's the ability to analyze... fast and variant. Does it make you a more successful investor? No, but it sure as heck subtracts emotion, forcing the brain into logical paradoxes to fend off emotion. Less or no emotion, then theoretically, stress free investing.. yay!... while you go broke! Double Yay! lol
Whoops, meant to comment and got all loquacious. Ask me the time and I'll give you the history of the watch.
@tarazkp always a thought provoking post from you.
Exactly - it is just that the "volume" of token is going to change - which scares a lot of people as value increases.
I think this is another reason that attracts people to be active in crypto - it has a philosophy to it - many philosophies...
A really interesting comment - thanks. And the Australian in me is glad you call it "maths" ;D
I'm sure it doesn't help that crypto never sleeps as well... that little Coingecko always has something interesting to tell you.
Yep - it is a funny old crypto world - I am not sure when I am meant to get any sleep! :D
Haha, just hibernate when the bears are in charge.
Well, at least there is the world cup to look forward to :)
Hope is a powerful emotion. I try to not have expectations, but it is human nature to have some. I know we can be too often let down when we have these expectations.
Imagine living a hopeless life - just for a day.
Hopium is a hell of a drug man! Lol.
I've got decent holdings in both and I set and forget my formal retirement funds and actively manage and keep track of all my crypto stuff. For me, it's more relatable for my generation than it is stocks. Stocks are something I was forced into because it was done by my companies over time as a way to "help" the employees but in the end it's just a tax break for them. With crypto though, I make all the choices and I spend time learning and earning whereas in stocks, there is so much focus on getting you to use whatever managed plan and pay their premiums that it's largely a load of shit in my eyes.
It is a big factor I think. I assume that most people prefer to be able to "do something" with their investment, even if it is just to keep an eye on the total value.
I would add, crypto has a "discovery" factor, traditional markets do not offer to retail investors. Retail investors can only invest in consolidated instruments in traditional markets, just authorized investors have the privilege to join when a new project starts. In crypto, there are new projects every other day. It is risky, but you have a chance to jump in at the very beginning if you want.
This is a very good point - if I could go back in time - I would add it! :D
That type of sentiment of chasing the hype isn't a good thing. What happens when they lose interest and prices tank? They will mostly sell out and lose money in the process. It's too bad there are too many people chasing the hype.
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The same thing that happens when they get to their magic fiat number on the upside :D
Wait, so volatile assets are volatile?
I wish someone told me this ealier!!
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Now you know!! :D
I wish people would buy or sell cryptos knowing that they (not all) will be used in the decentralized economy in the future as we use fiats in centralized economy today. This is the longest of long-term investing.
I believe most people are in it to not be in it in the future...
It is quite said that the prices in Crypto aren't stable but still with hope, I believe makes majority to keep the Investments in Crypto alive with a positive and beneficial profit when prices go up. Though is not guaranteed as expected but with positive hope is possible
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Prices are likely to go down a bit for a while - but who knows :)
What do you thn about Hive and SPS?
Where is the bottom?
Zero.
Hard to say what the bottom will be this time around - but perhaps 10c on HIVE - though I don't think it will get there.
It just the way i do invest, use little money to invest hope in a year or so i will make 100x, not making propare research on the token, and later the token will make that 100x but against me.but for now i have learnt alot that you don't just buy token because of the hype around it, but also propare research about it, know the project road map of the project and the how the community it going about the project.