We have all heard the famous quote by the greatest investor of all times Warren Buffet, or at least read a variation of it somewhere over the internet:
"Be fearful when others are greedy and greedy when others are fearful"
Warren Buffet
(In actuality the original version sounds more like this:
We "attempt to be", not "always are" as a rule - all rules have exceptions;
you should know the value proposition of the stock(or any other asset for that matter) and believe in its fundamental worth, otherwise you might be greedy on something that is going to abyss forever (for example some useless shitcoin like bitconnect, or even a once great company that is no longer relevant like Blockbuster) or being fearful on a revolutionary pioneer and leader of breakthrough - for example Tesla, or Bitcoin )
Yet, what we see happening on the crypto market over the past few days, is hard to comprehend or explain using the above thinking. Why is that? Well, that's an interesting question hmm...
Maybe most people have not heard or read Buffet's quote after all or simply view "crypto" as a temporary chance to make nice gains, without realizing the fundamental value of Bitcoin, Ethereum or even Steem?
Or could it be reverse greed of the whales and fat cats, trying to drive the market as low as possible before their "smart money" kicks in and gets them a fair share of the initial craze that they missed out on?
Well, guess there could be a bunch of different reasons, as FUD & newbie ignorance is something that we surely do not lack in the crypto scene.
(by the way, newbie ignorance is a blessing which I hope will multiply as a result of new people being exposed to crypto, and not because of "veteran newbies" that do not want to learn and are in it for a fast buck only - I myself was a complete ignorant newbie + sceptic just a few months ago, so a friendly shout-out to all the honest newbies pouring in! ✋)
To add some more "science" or rather statictics and facts from the past into the matter, I want to share a video by a very smart guy(Alessio Rastani) that I kind of follow here and there.
In the short video (8:38) which he released yesterday, Alessio talks about this very same subject - rationalizing that since bitcoin has never retouched the 200 Simple Moving Average in the past 2 years, it was king of anticipated that a huge correction was about to come, and he shows similar cases from the history of the stock market.
I personally learned/reinforced a few great points from it, and its interesting to see whether what he says is going to become another fact in history or will the panic driven market continue to move farther past the 200 SMA which bitcoin recently touched and left behind!
(btw I don't know why in Alessio's video 200 SMA is around 6000k, because it seems to be around 8000k according to bitstamp - please correct me on this if you are really good with graphs and indicators)
(from Alessio Rastani's video, video attached below)
I think it would be fair to mention, that I myself - as a strong believer in blockchain technology and the amazing benefits that the crypto revolution is bringing to the world - am not among those that are currently panic-selling.
Actually, I'm taking Warren's "advice" (the quote we opened this post with) to heart, and that's what I would tell anyone dear to my heart to do as well 😊
(*not a financial advice of course, just a word of consolation to my panicked father hehe)
After all, it's good to remember, that you can not lose until you sell what you bought at a higher price, especially when we put things into proportion and realize that this is a very young market that has hardly reached the tip of its full potential.
According to various (still questionable yet foreseeable) future forecasts, chances are that the crypto market will be bigger than the stock market, as stocks are very likely to be tokenized and transformed into crypto assets - (as well as gold, diamonds, real estate etc) - in fact, there already are aspiring crypto projects that are planning or doing some of those already. (for example: DIGIX(DGD) for gold or Propy(PRO) for real estate)
Therefore, there is good chance that even unaware FOMO idiots (like myself) that bought their first satoshis when bitcoin was at its peak, will be well off in the long run. The question is - who will be here in the long-run and who will be those poor dudes that sold their bitcoins because they though it could never go any higher and lost big time.
By the way, for those that were not around in the early days (hint: me and maybe you), It is always helpful to sneak into the past of Bitcoin and see what it has gone through - 5 huge "crashes" that seemed like the end of Bitcoin, yet here it is alive and kicking like a MOFO!
EDIT:
Thanks xcryptogurux from reddit for this sweet short summary of the biggest Bitcoin crashes in History (obviously the 2018 February "crash" is missing but that's what this post is about):
(Check out the original post here)
So, providing that the number one rule in investments was taken to heart (that we should never invest more than we can afford to lose), IMHO the best thing to do is to stay calm and H-O-D-L!
And of course to watch the market closely for amazing Black (or rather Red?) Friday sales which might not happen again any time soon.
For example I personally, missed out on the great prices for EOS which I am very excited about (Dan Larimer is the man!), and current "sale prices" make a fun shopping day in the market 😄
So watch Alessio's video, watch the market and stay strong 💪🏻
Disclaimer:
- This is not financial advice, just sharing some of my humble knowledge.
- EOS, ETH, BTC are part of my humble portfolio. I do not own any DGD, PRO.