HODL

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.

Crypto prices, finding a new normal?

| roger nunn

In the last couple of weeks Bitcoin has gone from an all time high (ATH) of over $ 60 k to around 40 now.

There have been stories in the news of what a failure bitcoin is and its lack of stability, etc.

It’s only a couple of months since people were questioning whether Bitcoin could get to 40 k and being delighted when it happened.

I consider this to be ridiculous, as we react happily to an upward movement in prices and dream of being rich and then despair because of a correction, partially caused by people taking out some of those riches.

Now the prices seem to have settled and started going green again, heading upwards.

I get around the problem by making a strategy and putting in buy and sell orders that generate a profit without me having to sit and watch all day.

I don’t make 100 X gains but as they are few and far between I can manage without them.

Remove emotion from trading and hodling.

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.

What to do with the money

| roger nunn

At the moment we are in a Bull market for crypto. It actually just means the that prices (in Fiat currencies like the US $) are generally rising. Bitcoin’s market cap (value of the number of coins times the current price) is more than 50% of the entire crypto market and so the market generally follows its lead.

There are fortunes to be made by trading within crypto, getting into coins just before they pump. Obviously choosing a coin is an inexact science, but it is exciting when you catch the wave.

The Bull market will eventually end and there are numerous people explaining what they think will be the timing, as you can expect huge reductions in value, especially with low cap alt coins. So the widely acknowledged strategy is to sell some of the coins as they go up “locking in” profits. This works well enough and you can then re-invest the profits in the next potentially good high flyer.

My problem is the same, however much profit I make. Assuming that there will be a Bear market sometime this year, I need to know how to keep my profits safe.

Keeping you money safe is the same problem whether or not you are a crypto enthusiast. The explosion in supply of fiat is very likely to result in inflation in the long run, so getting out of crypto is like getting out of the flying pan into the fire.

So it looks in the end that hodling in crypto (some at least) is going to be a long term strategy. I’m waiting for more people to accept bitcoin for big purchases, like houses or cars.

Exciting financial changes are here but not everyone realises it yet.

HODL or not to HODL?

| roger nunn

From the first days of crypto currencies they have been subject to ridicule as being just a game for computer nerds, cyber punks, etc. This lack of belief coupled with the “Wild West” nature of the new developments meant that they were volatile from the beginning.

Volatility in the crypto world is like volatility in financial markets multiplied by a factor of 10. At least.

This volatility makes for exciting times allowing people to make profits (or losses) very quickly just by trading in and out of various coins. I believe that the word HODL was coined in 2013 by a trader who mistyped that he was going to hold some coins even though they were dropping. It has also be renamed as “hold on for dear life”, which represents the difficult choices in crypto trading.

If you HODL you could get a massive gain (100X or more) or you risk losing virtually all the value. This is why one of the common trading practices is to invest, sell at a profit while the price is rising and then HODL the rest. This way you are able to get your capital back while still keeping some for the big rise.

Don’t forget that HODLING alone may bring you an increase in value but it doesn’t give you any profits along the way.

The volatility is still with us, something that can easily be seen through today’s drop in the value of Bitcoin by over 20%. Just imagine any other form of money that could drop 20% in a day and then bounce back soon afterwards. Obviously I don’t know what’s going to happen, but I feel confident that there will be a rebound.

So, should I sell now and make some profit, or should I HODL in the hope of a rise?