"When everyone is excited, you should be cautious [...]"
This has probably been covered by many people in the last few days... but here's my take - from a normal guy, who is not an all-sat investor. I have quite a few Cryptos in my portfolio, all looking very red right now.
Here are my options - and yours if you are still in the game after 30% - 50% losses:
1. Cut your losses, sell and re-buy when low. (or don't re-buy :D) However, I checked it too late and now I am in for the long-run. Why don't I just cut my losses now as it is likely to drop more as we approach Aug.1? Well, in my mind, you only lost when you sell. If I don't sell then the money ain't gone. Sure, if it crashes, then I will have lost a lot more (insert bla bla about only investing what you can loose).
However, here comes the Crux, I believe in Cryptos and in terms of market cap we are not even close to the dotcom-bubble. Nonetheless, price hikes of 1000% in one day is not normal no matter where you look - a correction had to come. I addition, ETH is tanking hard. I mean really hard. To me it's simple - right now we are in the range where all the ICOs are dumping the ETH that many tossed mindlessly at them. Their ETH is supposed to cover operational expenses etc. so they won't accept taking such a massive hit. If it was a get-rich scheme (or shitcoin), well congrats, we created our own whales.
2. Stay, buy when low, is my current option - didn't get out quick enough. Therefore I am using the more aggressive method of buying even though I am deep red. However, I think it is a great opportunity and many of the good Altcoins should pop back up. However, I am sticking to the established Alts, because they have a chance of recovering to the same level as before. I am also steering clear of ICOs, as I believe most of these are inflated.
I mean seriously, which start-up needs 200 Million Dollars to cover operational expenses???!!! If you go to kickstarter or look at Angel-Investors, you will not see such disregard for finances & business plans.
A couple of my thoughts on why we are still only at the beginning, and why I see the two options above as the only ones:
- As said before, this is not yet big enough for a bubble
- The market has seen such exponential growth, that novice investors were getting in on the action, without knowing anything, creating a euphoria and over-inflating prices
- Cryptos are still future tech. Despite the announcements you read, it is not even close to mainstream but it can get there
- People are looking for ways to stay anonymous in this transparent age and cryptos are helping to achieve that
- Cryptos also address real problems. Don't invest in anything that is called "Ethereum Killer" unless it addresses a real-world problem
So, on that note, I would like to say "Adios" to all people who were trying to make a quick-buck without knowing what they were doing. I would like to say "Congrats" to all of those that managed to make a quick buck and get out in time... and I would like to say "Cheers" to all of those that believe in Cryptos and are viable and have the luxury of my option 1 or 2 listed above.
Cheerio!
P.S: Don't forget, many of us are investors, not traders.