HODL

Should I buy, sell or hodl?

| roger nunn

I’ve been trying to get my head around crypto for quite a while. I am convinced by the security if the blockchain itself as otherwise someone would have cracked it by now.

I am specifically writing about Bitcoin as it leads and the others follow. If the Bitcoin encryption had been broken the whole crypto market would have collapsed by now. There have been various suggestions that a quantum computer will break the encryption so it always a possible outcome.

In the meantime I am watching the oscillation of Bitcoin’s value (in US$) and to decide what to do.

Currently I’m hodling but it’s not an actual decision, it’s more like a lack of decision.

I am sure that an active decision is the right thing to do, that is my job for today.

Does Bitcoin provide any stability?

| roger nunn

There have been many new crypto currencies since the gradual acceptance of bitcoin started.

Much of the criticism of bitcoin is linked to its speed of operation, its wild fluctuations and its massive use of energy.

There are many (very many) pretenders to the Bitcoin throne, literally thousands of crypto tokens, currencies, etc.

As far as I can see, Bitcoin is the only crypto asset that doesn’t have any inflation. All the others are designed so that the administrators can get rich on the backs of hopeful investors.

So, while all the criticisms above can reasonably be levelled at Bitcoin, it is the only one that has survived multiple government attacks.

Of course Bitcoin is volatile and people lose money by FOMOing and then selling on the dips, but that will settle down one day.

Crypto winter?

| roger nunn

There are endless articles about the end of crypto and the total demise of Bitcoin.

The crypto market has always been subject to huge fluctuations compared to other markets, such as stocks. When the crypto market is rising the proponents all talk about its power and show off how much money they are making.

Crypto is based on an interesting development in cryptography that allows for a permanent record of events, the blockchain. This will continue to work and to be useful until such time as it is surpassed by another technology.

In the last couple of years we have had productivity and the worldwide markets severely affected by a pandemic and a European war. It’s not surprising that the crypto world has taken a hammering.

Don’t forget that Bitcoin is now around $20K and in 2018 it dropped to under 4K.

As to what happens next… People all want free money from the expected increase in value of crypto and are waiting for signs of a return to higher levels. If it happens it will be at someone’s cost. Holding crypto is a zero sum game until it is actually used for something that helps transactions.

So maybe we should start using crypto rather than speculating and hoping for free money.

Bitcoin fluctuations

| roger nunn

Bitcoin was the first widely known crypto currency. It has fluctuated a lot but overall has had an upward trajectory. It’s often quoted that had you bought a few thousand dollars worth 10 years ago you would now be rich. That idea is pointless as it’s always easy to be right in hindsight.

There are nearly 20,000,000 bitcoin so far, many of which are in the hands of a relatively few, the “whales”. This means that they can affect the price by buying and selling, collecting huge profits from those who buy in “fomoing” and then panic sell when the price dips.

I talk about only Bitcoin because the rest of the crypto market generally follows it up and down, even though other coins often make bigger gains (and losses) along the way.

I feel that the increasing level of knowledge and interest in the crypto market means the it is gradually maturing. It may be that the volatility is diminishing, thereby bringing bitcoin closer to its long term potential.

My thought is that it’s worth having some bitcoin even if you don’t believe in its future as then you don’t need hindsight.

FUD is a tool to get your money.

| roger nunn

Fear Uncertainty and Doubt, three words hidden in the often used acronym, FUD.

FUD occurs when an article is written suggesting a problem of some kind exists for a token, coin, exchange or a new crypto development. There are many writers looking for news, some of whom will quote the story without checking its truth or validity.

Of course, once more and more people write about it, the FUD spreads very quickly and can cause a large price correction for the crypto involved, which goes on until the original FUD becomes a self-fulfilling prophecy.

This means that the market prices can be manipulated by spreading a bit of FUD, with the perpetrators being able to buy assets at a reduced price.

The use of FUD together with articles that induce copious FOMO mean that high worth traders can make considerable profits at the cost to those who make trades based on emotions.

So, don’t buy at the top or sell at the bottom.

Sell as you make profit and only buy when your reading suggests that the token or coin is likely to rise.

Easy to say!

Choosing an alt coin

| roger nunn

I am happy to see that bitcoin is once again above 60000 US $. It means that hodling has proved to be a good strategy.

Now I’m looking for something that could give me a 100X return. I know that it’s risky but I accept the possibility of loss.

So how do I choose?

There are thousands of alt coins. I search for those with a Market Cap of at least 1 Billion and a token value of around 1 cent. I then look at the exchanges used and the daily turnover, selecting only those that are actively being traded on reputable exchanges.

Once I have a list of possibles, about 4 or 5, I then read about the uses of each one. At this point it becomes a bit subjective and I choose one that I like.

I then buy a bit and put it into a wallet.

Next I ignore it and wait and see.

I sometimes gain but have never had 100 X increase in value. I have also lost but I’m more likely to gain in the wake of an increase in the price of bitcoin.

That’s it!

To Hodl or not to hodl

| roger nunn

The crypto world is full of opportunity, opportunities to strike it rich and opportunities to lose a lot of money. The problem is to know what to do.

The control of money rules human activity, so there are huge numbers of people wanting to jump onto the bandwagon of easy money through crypto. The easy money idea is great but it is never guaranteed, it mostly comes with the luck of owning the right crypto at the right time and then selling at the right time.

The easy money idea is thwarted by our own greed and emotional involvement. We FOMO in as soon as free money seems to be on the horizon, like Dogecoin, where many people bought huge amounts after it had gone up. The extra buyers put further upward pressure on the price, increasing the FOMO induced purchasing even further.

It’s easy to find people online explaining how they got rich through buying Doge but not many are willing to admit how much they lost by buying at the top and watching its value drop. They perhaps had not realised that the price rise is fueled by new fiat money coming in, so when others sell their Doge and remove the money, prices drop.

I watch the daily fluctuations in the coins at the top of the market capitalisation tables. The prices have being going up and down like a yoyo recently but I have found that you have to monitor them constantly to make a profit over and above the costs of trading.

My decision for the moment is to HODL what I have and only sell when a coin gains more than 100%. Life is less stressful and it seems to me that having some crypto is important to be able to gain in the longer run.

So I HODL a selection of different coins and try hard not to suffer from FOMO.

Crypto growing pains

| roger nunn

When I was a child my parents used to talk about “growing pains” in relation to real or imagined difficulties experienced by myself or my siblings.

I never found out if there was such a thing as a growing pain but I feel that the idea suits crypto currencies very well.

Crypto is no longer new but it has not yet matured at all. It is leaving infancy and is unlikely to die, especially given that its market cap (total value) exceeds 2 trillion and it keeps finding new use cases (areas where it adds value to the current way of doing things).

I see crypto as a teenager, suffering from growing pains as it starts to mature, still unsure of what the future hodls and full of excitement about its place in the world.

Once crypto grows up there will probably be less uncertainty but also less excitement linked to its current unpredictability.

Therefore now is a good time to learn and get involved, even making money in the process.

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.