Current situation:
bitcoin has been in the media recently when it flies all the way up to $19,991.60 on 17th Dec 2017 before pulling back all the way to $12,009.80 5 days later. The price is not exact due to the different prices in different exchanges. So, if you just started to jump into the market buying bitcoin at the top with all your saving thinking it will run up to $100k (which is 5x from $20k; which is a good profit), emotion such as fear will set in and make you sell at the low of $12k making a lost of 40% of the capital.
Many people only know about bitcoin and some see it as a future, some see it as a ponzi scam. With all the different take on bitcoin from the influencer such as Warren Buffett and Bill Gates and Richard Branson, who should you listen to? When one rich and famous guy said it's a fraud and it will be gone for good in years to come, and when another one telling the world that this is future, which side do you take?
bitcoin indeed has come so far since the start in 2009 by the guy called 'Satoshi Nakamoto' from less than a penny rising all the way to $20k. Seeing the steep rise in a matter of months, do we see it as a bubble or it's just a beginning? It's a mixed bag as people who has not get into bitcoin would hope that this bubble will burst so that they can purchase it. If this is the case, that would mean it will continue the rise. However, if people think that this is nothing but purely computer code that is intangible, it would worth $0, they would not touch it even when the price retreat. And for those who are already holding bitcoin at different level, will hope it will continue to rise forever.
For those who are already immersed into the world of cryptocurrency, you will know that it is not all about bitcoin. There are altcoin (coins other than bitcoin) and bitcoin fork (coins that are similar to bitcoin). Media focusing on bitcoin rising from $1k to $20k in less than a year which is a whopping 20x! $100 invested will become $2000 in less than a year. However, if we look at altcoin such as Verge (XVG), it was only $0.000018 at the beginning of 2017 and hit all time high of $0.29 which is a whopping 16,111x! For just $100 invested, you would have become a millionaire with $1,611,111 if you sell it at $0.29.
However, as we look through the chart of most altcoins, you will be suprised to see many coins started to rise since March 2017 and on average easily 10x-10,000x. Those that has not gone up more than 100x, seems to be considered as undervalued and will get pumped up in time to come. And for new coins that were just put into exchange after their ICO (Initial Coin Offering; similar to IPO without any regulation), if they are sold down to below their ICO price and remain same price for some time, it will be considered as a good coin to enter and will be pumped up in no time.
Also, we get to see a number of 'pump group' who will choose certain coin to pump each day. Recently, we have John McAfee who founded the McAfee software has created quite a bit of hype with his everyday 'coin of the day'. Each day, he will mention a coin and within the next 30 minutes, it will be pumped up 2-3x before going down again. It was since he mentioned Verge coin which make it rise up non stop from $0.005 2 weeks ago all the way to $0.29. Hence, everyone stay by for his 'coin of the day' everyday.
Should we invest into the Crypto world?
So... The question for those who had not participated in this crazy pumps, do you enter now and join in the fun or wait for the music to pause or stop before going in? I'm not a financial advisor non an expert, but it would all depend on your belief in this new and upcoming technology. All these pop up to create a new future, which we will see a major shift of money from one person to another person. The main intention of Satoshi Nakamoto is to decentralize the future currency so that we are all in control of our own currency. As the cryptocurrency gets hotter each day, we see all kind of ICO popping up with all kind of businesses that are trying to link to the blockchain technology.
If you are really interested to get into this exciting market, it would be good to understand the background of the technology first and see this as a long term investment rather than a short gain even though in a Crypto world, 1 month seem to be like a year. I have personally entered this market 1 month ago exactly and has grew my portfolio more than 4x. The time I entered the market was actually when bitcoin was at the peak of close to $10k. But I just enter after tons of research. It was really a great ride and I have since cashed out my capital and let the profit roll inside.
Why do I get into this world of Cryptocurrency?
- Believing in the blockchain technology that will change the world.
- Seeing this as a future with new crpytocurrency.
- Investing 'play' money without afraid to lose
- Buying up coins like a hobby of buying collectable to keep.
- Be part of the community so that this community will grow with our 'funding'.
Who should not get into this?
- Those who do not understand the technology
- Those who want to get rich fast by thinking of using loans and life saving to earn from this volatile market
In this Crypto world, things move fast 24/7 unlike normal stock market where things will happen even when you are sleeping. So to get a good night sleep, using 'play' money will make you sleep better. As you can see, $100 could becoming $1M within a year, why do we need to risk our life saving to turn the earning to bigger amount (which is only one side of the coin)? Using $100, you could potentially get a good return if things turn out well, but if things turn against you, or if everyone decide to cash out, using life saving means losing everything. Hence, we would have to control our greed and fear.
In this world, the term used commonly are:
- FOMO (Fear of missing out) - afraid that the price will keep moving upwards, hence, would dive in at the peak so that nothing was missed out
- FUD (Fear, Uncertainty and Doubt) - when things turn bad, you will fear that it will go down further, but at the same time uncertain whether to sell or to hold or to buy more. And doubt whether it will rise back. This will cause you to sell at a lost at the lowest point. And usually when it was sold at lowest point, you see the price pick up fast and rise up to the top again after you sold off at a lost
- HODL (Hold on for Dear Life) - means to hold as long as you can without selling off for a quick profit. this may be one of the result for the price of most coins to move up exponentially. When everyone hold without selling, it will drive up the price.
I will write more about my journey in the Cryptoworld in the next post.
So, if you are interested to get into the market, you can join the two of the exchange I have used so far:
Coinbase (use this link to earn $10 when you start buying the first $100) - https://goo.gl/r1LFYp
Binance - https://goo.gl/T67cRM