You didn't invest into crypto... did you?
I was asked this today at lunch by one of the guests at lunch today, as we were tlaking about the current state of the economy and where it might be leading in the next 6 to 12 months. I only had one answer for him:
Damn right I am!
That must be painful! Isn't Bitcoin 50% down?
No, it is 70% down from the high, but it is still 400% up from the 2020 low.
For people who aren't in crypto, there "exposure" to it are the headlines they read and the odd story here and there, but rarely do those cover a timeframe of more than 6 months and they always look at the value compared to the most recent all time highs. This is obviously going to look bad for the investors, but it is actually about the same as buying Amazon, Facebook or Twitter at their most recent ATHs.
As I explained to the guy (very briefly) is that the volatility of crypto is what makes it so interesting, because while there are 70% swings down from the ATHs, that last ATH was 1400% from the previous low. It is because of these massive spikes that the drop is so extreme, because people who bought in at 5K are able to take profits all the way up to 65K, or all the way back down to 5K again - which means that if a person bought 10 BTC at 5K, and averaged the sell at about 40K, they are going to be 350K up in about a year - and if they bought their 10 BTC back today, they would still have 200K in pocket.
Sure, not many people might have been able to manage that, but it is likely that a lot of big buyers did, buying the FUD and selling into the hype along the way, knowing that the retraction was going to happen and they can get back in again.
But, the average person fears the volatility, because they don't want to wear the loss, because - what if they are buying the top? This is always an unknown, but many crypto people have bought the top and survived the drop, held all the way down and back up the other side, possibly a couple times. And, because there is "another side" they don't fear the fall in the same way as someone who hasn't experienced it - They just push out their timeline til retirement a couple years further and hold on.
I wish everyone would get into crypto, and not because it is some Ponzi that will push the value of my holdings up, but because it teaches through active participation, the experience of investing, trading, failing, researching, failing, the hype of the ups, the pains of the downs, failing...
There is a lot of failure...
But, it is a good lesson in emotional control and resilience, two traits that at least I feel are severely lacking in society today - which is part of the reason so many people are scared of crypto, because they hear the stories of people who have precious little patience or self-control, FOMO in and lose everything. But listening to the experiences of those people is like giving the controls of a plane while flying to someone who has never flown a plane before and then, using the outcome they get as the reason why not to in planes.
A pilot needs practice and experience, and in the same way that a good sailor is not made in calm waters, the turbulence of the markets helps people build skills that they might not get elsewhere. Not only that, it also breaks a lot of the conditioned beliefs about money, that so often create unhealthy relationships with it. This by itself takes a lot of power out of centralized currencies because once the emotion is gone, it is just another tool to use, or not.
And, the more people get into crypto, they more they tend to see the problems with it - but how the positives and potential outweigh the drawbacks. This experience inevitably leads to people seeing the massive flaws in the current economy and bit by bit, converts them into agents of change, just by having an increasing amount of their activities transacted on blockchains. Participation is very much a protest of current conditions, where the economic feet do the walking away from an abusive system. It doesn't happen all at once,
but it is a death by a thousand, then a million and soon a billion cuts.
In time, the volatility will decrease with wider acceptance and usage, as well as the growing number of businesses building and fleshing out a fuller economy. But for now, getting accustomed to the ups and downs is necessary for survival, otherwise "crypto insanity" sets in, which we often see exhibited in the Hive meltdowns.
Have you noticed that no one seems to rage quit at the highs?
It is just like that at the highs, the crypto skeptics who like to troll enthusiasts are very quiet.
But, for those who are in crypto, the volatility means an opportunity, where all kinds of moves can be made, which is part of the reason people are so engaged. Not just because of the potential to profit, but because they actually get to make the moves themselves, rather than relying on third-party managers to do it all for them. This is another experience that people need to get used to...
Self-direction.
Having to take responsibility might be one of the biggest fears for many getting in, because we are conditioned to be reliant. Breaking this reliance on centralized currencies and therefore those who control them, goes a very long way to improving the outcomes for billions of people on this planet.
The question should really be:
You aren't investing in crypto?
Taraz
[ Gen1: Hive ]
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What other option is there? Fiat, shares, precious metals?
No-coiners think we're reckless, and they'd be right if there were any safe or promising alternatives.
Most don't think about these things at all - they just look at the "alternative" of crypto - thinking that what they know is solid.
Honestly, I'm not sure people should really be investing in crypto until they've got all their debts paid off and have saved an emergency fund and have a really good idea of what crazinesses and awesomeness they're jumping into.
This is kinda why I like teaching people about Hive, they can get a taste, invest their time and learn some things without getting exposed financially.
But, I think that everyone should start investing, so if for example someone has 100 of whatever to put away each month into an investment, go 5-10% into some crypto - just to get in.
THis is something I want to write about more when I get some time :)
Yeah, that's a good point... I guess if the amount to invest replaces a dinner or a night out then it's definitely a good idea to invest just to get in, but when the markets turn down and people don't have their debt (or savings) under control, and they have to sell their volatile investments at a loss to dig themselves out, that doesn't help anyone. I'd guess they'd be unlikely to try crypto again because they've been burned.
This doesn't even include the people who try to invest their way out of debt which must be so incredibly stressful.
This is why I think it's super important for people to get their debt and savings under control before investing, because you never know what's going to happen to the economy or in your life...
This is sensible and logical advice I give it myself sometimes, only problem is no one likes to hear it.
Hahaha, hopefully you trust yourself enough to follow your own very boring advice.
Lol, always that same question.
And when you give that answer, it's always the same blank, skeptical look that inevitably comes back.
Just wait until you try to explain what you've done with any yields generated in the meantime!
🤯.
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I don't even bother with most people in regards to yields - it just gets too much for them :D
The response I always find interesting is when people seem to think crypto is "a scam" because the markets can swing so wildly.
I like to respond with the question "do you think Amazon and Dell are scams, as well?"
Blank stare
Both Amazon and Dell stock was as much as 50X (or more) from their lows, at one time or another.
Bottom line — I suppose — is that you have to believe that crypto is going to be a permanent part of the financial landscape, going forward.
=^..^=
When they here "Amazon" they think that because it is established now, it was always safe - but even that has dropped 40 odd percent in the last 6 months. :D
Tell these people to come to Hive, then they won't be using their hard-earned Euros, but, only investing their time.
How can they argue with that? This is the best investment I have ever made and did not have to spend a cent, if not wanted.
Yep -but it is a catch-22 - because while they don't want to invest their money, what they earn is also not enough to be worth it. They have to make a decision which it is at some point :)
These are probably the same people who wouldn't be happy if you gave them a new rope to hang themselves.
Still many people think that investing in Crypto is the worst decision and they think that those asset which we invested in Crypto that lost for forever.
In my case many friends of mine wanted to know the situation of my invested asset when BTC crash badly. They try to make me understand that I made a wrong decision investing in Crypto when I never regretted for my decisions because I know that in upcoming days they will change their word when the price will go up.
I am very hopeful that after 10 years many people will regret thinking " i wish,i bought some crypto 10 years ago". I don't wanna regret like them in future. So i think i am on the right direction.
Just think back ten years, where many people knew about crypto, but did zero. I was one of them... still, five years later, I did make the plunge :)
I am not really buying much at the prices but I do keep my current positions. At least from my view, I don't focus on the price so much as I have a longer outlook for the tokens I invested into.
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I am limping in on some things - but holding everything.
Actually, I didn't invest in cryptos buying by fiats. However I can say that I have invested my four years into HIVE. This is kind of investment in cryptos, but not for price ups-downs, for a blockchain that has a brillant future.
I agree with you - this place does have a very bright future - if only everyone else realized it sooner! :D
I'd love to send this to everyone that I know, but even then I know they still wouldn't get it!
They have to already be looking for alternative - most aren't...
This is a very good write-up and very informative but I must say getting to know about crypto will help a lot and all investors should also know the nature of cryptocurrency the volatility nature but all I know is that it is along term investment and investors did not need to be in a hurry or rush to sell their crypto during this bearish market a good strategy is to keep buying the dip for a long-term investment
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Everyone is in a rush these days - people are greedy for all things - including time.
Hmmmm I agree with you there time for everything but humans are always in a rush and it's not a good idea @tarazkp
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I believe in Bitcoin...
I have no problem investing my extra time out here on Hive rather than investing money as in that case it would have been difficult for me considering my low pay.
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I can just picture his face as you "briefly" explained. This is what so many don't understand as the value is there if you use common sense. I have invested time into crypto and look where I am now. That time would have been used doing what, most likely watching crappy tv or doing nothing constructive.
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Is it the currencies or rather the ways we use those, though? To what end do we spend any currency we get our handses on, that is about breaking some habits of habit and caring about outcomes, people, or planets in the first place.
There's so much disinformation out there...good to know you are ready to correct those who don't know enough to see what's out there.
Thanks for sharing, @tarazkp
Annabelle 😊