future

Now…..should I buy or sell some crypto?

| roger nunn

We have had a few weeks of dropping prices (in US$) of most of the crypto space. At the time of writing, a recovery seems to be in the air but,…..

There seem to be equal numbers of doomsayers predicting a collapse as predicting a huge rise in Bitcoin ( with some others being touted as the replacement of bitcoin).

So what should I do?

Right now I am trading coins and tokens against one another, buying those that have dropped in value with those that have risen. This system works, slowly and with a lot of manual intervention. I have looked, and am still looking for an AI based robot that will do the tedious buying and selling for me, making money as long as there is fluctuation.

If there is a good auto-trading bot that works I am unlikely to hear about it, the owner will simply build his portfolio while saying nothing.

I still don’t know whether to sell my holdings or to buy more, one of which is likely to be a money making step.

I will probably play it safe, buy a little and hope that the whales manipulate the market in my favour.

What’s next in crypto?

| roger nunn

No one knows the future, unless they control it. In crypto there are a number of parties battling for control of the technology and the wealth attached to it. A number of writers have compared the adoption of the blockchain to the adoption of the internet, with the fortunes that were lost and made.

As things are at the moment it seems that the use of the blockchain is increasing exponentially, with more and more uses appearing daily. The positive side of the development is the very high returns on investment for those who choose to invest in the winners.

Unfortunately, non-wealthy people like me cannot influence the market, nor can we easily guess what is going to succeed and what will fail. Right now we have had a huge drop (50%) in the value of Bitcoin with a corresponding drop in the value of the altcoins.

So what is the best strategy to follow. I prefer caution, which means minimising risks. So I continue to sell my coins when they have made a profit, and buy low. It’s difficult to decide, given that had I sold my hodlings a month ago I would have made more profit.

Could have! , Would have!, both ideas that rely on hindsight. So in keeping with the idea of caution, I have sold most of my holdings, taking profits on them.

I hope that we are in a bear market and intend to buy more in the Autumn, depending on whether or not there has been further drops. At least I am in profit now, even if the markets shoot up.

I have kept small amounts of some coins anyway, so even if there is a big rise in prices, I will still make profits.

Having said all that, it’s easier to make profits in a rising market, and I like it when all the charts are green.

Is crypto finished?

| roger nunn

Whenever Bitcoin changes value the rest of the crypto market reacts, usually mimicking Bitcoin’s moves. There are many opportunities to make money buy strategically buying and selling other coins, provided that you time their changes against the value of Bitcoin.

Bitcoin’s value dropped by half in the last couple of weeks, which brought out the doomsayers, with endless reports about the end of Bitcoin.

In reality it is a bit more complicated. Bitcoin was the first cryptocurrency and because of its inherent limitations in terms of speed, has morphed into a store of value rather than a useful tool.

The rest of the crypto world is developing quickly with new coins and tokens coming online all the time, most of which have specific use cases. The development of the crypto world is very competitive with their relative values changing constantly, as was the case for web based businesses in the early days of the internet.

So I believe that as the crypto market matures, there will be many opportunities to make money. However there will be many opportunities to lose money as well, which is why I have only invested money that I can afford to risk.

Now each Bitcoin is worth close to US$ 40k, taken by many to be a disaster. Many panicked and sold their holdings at a loss, a stupid thing to do and one that only exacerbated the situation.

At $40k, each bitcoin is worth about 4 times what it was a year ago, so profit is still the order of the day.

Anyway, I don’t like the current sideways movement of Bitcoin’s value as big fluctuations provide a better opportunity for me to buy and sell at a profit.

The Bitcoin club

| roger nunn

There is a gradual public acceptance that there might be some value in crypto currencies, specifically Bitcoin. Those who invested early on and didn’t lose their private keys have made significant increases in their wealth.

I remember being interested in the idea in 2012 but didn’t buy any because it was a lot more complicated at the time. Buying and trading wasn’t easy and of course now I wish that I had made the effort.

Everything is clear with hindsight so now I’m looking forward to get it right this time. I know that is always some risk but without being involved I can’t expect to benefit.

I have small holdings of a number of crypto currencies and some bitcoin. Some bitcoin here means some part of a bitcoin.

In the long run I believe that the value of bitcoin will continue to rise and eventually owning one whole bitcoin will be like being a multi millionaire in today’s world.

So owning one Bitcoin will be like being a member of an exclusive club, and those people who are lucky enough to hold thousands now will be the wealthy ones.

Crypto, what to read about.

| roger nunn

I think it’s great to be involved, even though only slightly, in one of the new developments in finance.

As it is a new (ish) technology, it is changing very rapidly with new ideas appearing all the time.

Decentralised exchanges are a good example of rapid change. A year ago trading was done through an exchange who listed the coins and facilitated exchange, changing a fee on the way.

Exchanges have proliferated and got rich in the meantime. They have made it easy to buy crypto and then exchange it or return it to fiat.

Now we have decentralised exchanges appearing that automatically match transfers without direct fees. The exchange works differently with users being able to stake their crypto and share in the fees generated.

My problem is that however much I read (and watch) there is more new stuff being generated, creating new parts of the crypto world.

So I will follow the new developments such as creating NFTs and only get deeply involved when it seems to lead to change.

Spreading the word on crypto

| roger nunn

Yesterday I made a short presentation to family members to explain what crypto is all about.

I have been interested in bitcoin since around 2015 and spent many hours reading and watching videos before starting to trade it myself.

I went through the 2017 boom and the drop that followed, all the while learning about it and watching new developments.

Now I am even more convinced as to its long term viability, especially as I believe that the decentralised consensus is an excellent way of linking the power of spending to real democracy.

However, finding a way to present this view of the future without appearing to be a fanatic proved to be very difficult.

I ended up by talking about the reason for bitcoin’s development and the benefits it can bring wherever value needs to be maintained or transferred.

I am working on totally non technical presentation that gives a newcomer an idea of What and Why, followed by How.

Looking to the future

| roger nunn

For about a week I have been trading futures, based on the rise and fall of bitcoin relative to the US $.

I have been using very small amounts of money with only 10 X leverage. This is because leveraging multiplies losses as well as gains. I put in stop-losses that sell your holdings automatically if the price starts to drop.

It sounds as though it should be a winner and seems to be for the professional traders.

I found that for the amount I was willing to risk, the fluctuations minute by minute were enough to very quickly move the price to my stop-loss level. This easily limited my losses and I managed to make a few gains. However I had to pay fees for every trade and I found that I was losing overall.

This last week saw an end or at least a break in the bull run so I couldn’t rely on a steadily increasing bitcoin to ensure profitable trades.

So I lost a bit but now I feel that I understand what it means to short or long a future contract so I consider the loss to be acceptable.

In the end futures trading can only be a form of gambling, we can’t know what will happen in the future.

It is exciting when you make a gain.

One way only from fiat to crypto

| roger nunn

When you want to buy crypto (probably bitcoin) you can create an account on any of a number of exchanges and simply transfer fiat currency straight into the crypto of your choice.

This might be more difficult in a jurisdiction with monetary controls but it works easily for me, being based in the European Union.

Once you have the crypto on your exchange account you can trade it for other cryptos or transfer it easily either to another exchange or to a wallet.

It’s seamless, easy, usually cheap and very fast and of course it operates 24/7.

Returning the crypto to fiat feels slow and heavy by comparison, with banks taking some time to make the money available. It really feels like a step backwards in time, like returning to writing cheques for bills and then waiting 3 days for the funds to clear.

I can wait for universal adoption of crypto, easy transfers without the cost and time lost using fiat

I’ve made a profit

| roger nunn

There is a very good feeling that comes when you sell coins for a higher price than you paid. The same thing happens in lots of businesses but few of them happen so quickly or directly from your phone. I like making a profit, but it doesn’t always work.

So let’s say that you have bought some crypto, watched its value 5X or even 10X and you sell it. Great, you have now improved your finances by making a profit. It is very satisfying if you are very clever (or just lucky) and sold just before the price dropped. However, it is unlikely. You are more likely to sell and then watch the price go on up and up, which brings a feeling that you should have waited.

Now you have your profit and feel successful. The problem is, what next? The difference between when you started and now is that your capital value has increased, but you still need to decide what to do to make more profit.

This is why you need to have a strategy that includes buying, selling, extracting profit and using it to build your portfolio.

My strategy is fairly simple. I don’t sell at a loss, and sell some of my holdings as the prices rise. Of course the outcome of this is that I accumulate various coins that have not risen since I bought them and that I never have a really big profit that comes from a large investment that goes up 100X.

I listen to various youtubers who devote a lot of time to forecasting the most likely big gainers. The ideal would be to find one who uses our money to make a profit. There are lots of people offering this possibility but it doesn’t fit with the idea “not my numbers, not my crypto”