Many of us have discovered Bitcoin (BTC), Ethereum (ETH) and other digital resources in the last year or so. Before that, we probably had no idea that this technology had existed since 2009, when Satoshi Nakamoto launched the Bitcoin Ledger. We felt comfortable with life as it was before we started to hear from mainstream media and social media, about how there was this new way to invest with the potential for huge gains.
For many of us, the doubts were. But once we read the technology, our curiosity was amplified and we bought our first digital resource in the form of BTC, ETH, LTC, XRP or one of the most important coins. We then made our research and found out that there was a pool of interesting blockchain and cryptographic projects. Our eyes were wide open and the excitement was there.
This excitement on a global scale is what has probably caused the bull run that we have seen since last October up to the beginning of February of this year; when the market started to contract due to regulatory concerns from South Korea and Japan. Then the US IRS came in with their hands open asking for their share of commercial profits in the form of taxes.
Marathon, Not A Sprint
From the point of view of a traditional investor like Warren Buffett and George Soros, the events of the last year clearly look like the tulip mania of the 1600s. Important investors like Buffett and Soros have understood the fundamentals of investment and the increase in value of the encrypted markets was not organic (natural). For lack of a better analogy, it was a sprint to get rich that was amplified by the fear of losing. The first to collect have been enriched. Those who arrived late got a rekt .
But we borrow a leaf from the great Buffett and Soros, understanding that any kind of investment is a marathon and not a sprint. Investing involves buying and HODLing for more than 6 months. And before buying any resources, you need to do a lot of research that includes who is conducting the project; the roadmap; the final product or the real-life problem that solves; and how long it will take to get it.
Take the Tron project as an example. Justin's game plan is to decentralize the web in 10 to 20 years. Therefore, HODLing and cash in loss after 3 months does not see beyond the proverbial nose.
In conclusion there are several investment strategies out there when it comes to digital resources. In this particular episode, we focused on long-term investments that can be compared to a marathon and not a sprint. For those who are more risk tolerant, day trading, BitMEX shorting and scalping may only be viable options in the current bear market.[Photo, 2017 BMO Vancouver Half Marathon. Source, teamsetlack.com]
Disclaimer: this article does not intend to provide financial advice. Any opinion here should be taken as well as it is. Perform your research before investing in one of the many cryptocurrencies available.