January 24

HARD Crypto Decision-Making…


If you’re holding Crypto and are in profit right now, you’re in a bit of champagne dilemma. 

After a 2 year lull, Cryptos have rapidly expanded and when looking at pretty much any crypto chart right now, it’s vertical. And it doesn’t take a seasoned trader to understand that vertically rising markets often don’t stay vertical for long…and when they correct, it tends to be in a vertically downward motion. 

This leaves us in a bit of a tormented mental quandary. Do I sell up and wait out? Do I HODL n hope? Do I sell up and try and perfectly time in a re-buy? Despite knowing that corrections and bouncebacks can happen in literally minutes! Do I sell a little bit and then use those crystallised profits to then trade/time a rebuy? WHAT DO I DOOOOOOOO!!!!!? If you’re in this quagmire, don’t worry, I know your pain. Everyone else is in the same boat.

Before some potential options, it’s worth highlighting some of the bigger picture things at the moment in an objective and non-weighted fashion.

– Many metrics out there highly sign-post that we are still in the foetus stages of a truly revolutionary technology/market. Akin to the internet back in the early 2000s. A game-changer for the Internet was when DNS came about which meant that people didn’t need to type in IP addresses to visit websites and people could get simple to use email addresses. Crypto still haven’t had its own ‘DNS’ fix yet. So it’s incredibly early days. (Medium/Long term Bullish).

– At the same time, because it’s still in its infancy, the market is thin, bag holders are highly concentrated and thus, manipulation is rife! Hence 20-80% corrections are the norm! (Short term Bearish).

– Big money (Central Banks, Banks and big institutions like Blackrock) is finally waking up and playing catch up! Hence the large capital inflows. This is only positive for the legitimacy of this market which will attract smaller money (Funds less then $1B AUM (Assets Under Management)), celebrities and perhaps the attention of the 50 million+ millionaires in the world! (Medium/Long term BULLISH).

– At the same time, BECAUSE the BIG money is now sniffing this out, when they inevitably want to secure a stash of their own, they won’t just log onto a Coinbase account and buy at market; they will instead secure a load of crypto (most likely Bitcoin and Ethereum) via options, futures contracts and vanilla Over The Counter transactions. But all of this will be done via an execution service so if the FED wants to get hold of $100B worth of Bitcoin, they will get Goldman *coughGovernmentcough* Sachs or JP Morgan to do it. They will then manipulate the market and cause an almighty crash/tree shake, they buy in and then the market rebounds. Please remember THIS IS TO BE EXPECTED! DO NOT BE SURPRISED BY THIS. (Short term BEARISH).

– Crypto is more of a benefit to the developing world than the developed world. There are still roughly 2-3 BILLION people that don’t have access to the internet, a bank account or financial services. A large chunk of these people will be online over the next 10 year via the proliferation of very cheap smart phones and internet constellations (Starlink etc). The unbanked will become banked in a cosmic heartbeat. (Medium/long term Bullish).

– There is still a MONUMENTAL gangrenous/cancerous wound in crypto and that is the Crypto exchange Bitfinex which controls/prints Tether (USDT). This has been an ongoing thing for many years now. What started out as a ‘conspiracy theory’ is now a common knowledge reality. Looking at actual data, at least 50% of all the capital inflows into Bitcoin and Ethereum are done via Tether. And Tether is NOT 100% backed by the USD. Therefore if the bulk of money that’s propping up crypto prices is illegitimate, it shades the whole market and therefore it also means that these lofty prices we are seeing right now is also ‘illegitimate’. Most exchanges are banning USDT now and the New York District Attorney is currently investigating them. Tether is like the Enron of the original Tech Bubble. And Enron popping was effectively the top of drop for the Tech Bubble. And WHEN iFinex (the holidng company for Bitfinex and Tether)pops, it’s likely to result in a rapid 30-90% crypto crash. However, this crash is then also highly probable to be very short lived as Big, Medium and Tiny money around the world will see this as a buying opportunity like none before! The problem is, we don’t know WHEN this will happen. And in the meantime, Tether is now being pumped in to the tune of BILLIONS. So will we see this circa 50%ish crash happen now at a $33k Bitcoin? Or from $50k? Or from $100k? No one really knows. (Short/Medium term BEARISH AF!!!)

So there are a few Pros n Cons…now what about your potential options? 

1.) DO NOTHING! Just Hope n HODL knowing that you’re playing the long game here and that in the long run, you’ll become the next Bitcoin Billionaire! This is by FAR the least stressful way to invest in crypto. Just make sure you DON’T look at the prices regularly! That way you won’t get stressed out. I mean, do you get your house valued every day? No…because that would be silly…

2.) TRADE IT BABY! It’s ok, you’re a market lej and your squirrel sense knows when to exit and jump back in. It’s going to take a lot of price watching, but you’re ok with that because you’re confident that by jumping in and out, you’re grabbing way more Satoshis along the way than the boring HODLer! That and also a lot more grey hair!

3.) THE REBALANCER! You know your emotional thresholds and realise that your stash has grown far beyond your desired nonchalance state. So you will simply crystallise enough profits so that your crypto stash is back at an emotionally meaningless size so that the constant market up and downs won’t phase you. In the meantime, you now need to figure out what on Earth to do with your new found profits! Stocks? Hmmm bit toppy. Property? Hmmm bit iffy. Bonds? Hmmm no yield. Commodities? Yeah, maybe, but no yield and it’s a slower play. Business(es)? Hmmm maybe. Great yield but high risk. Crypto? Hmmm, back to square 1!

4.) THE TRADING REBALANCING HODLER! You perhaps prefer a more dynamic and blended approach. You’re playing the long game but also want to maximise the short game. So you may perhaps sell off some profits so you’re not feeling as sketchy. But feeling safe that your main stash is still in the game. But in the mean time, you’re now playing with FREE MONEY! So you could perhaps buy into some alts that you’ve been meaning to get whilst at the same time, use a chunk of profits to trade and grow it. Perhaps try and trade your 0.1 BTC all the way up to 1 BTC by jumping in and out of shit coins every time they double up or something. Who knows, what scratches your itch!

5.) AHHH F**K IT! You’re now completely done with Crypto and want out. You’ve made enough profits from this BS market, so now you’ll just convert your new found profits into something TANGIBLE and REAL! So you may plop it into a house deposit or something and rest happy that you’re one of the minority on the planet that Mother Crypto didn’t spank!

So there you go folks. Not a definitive list, but a quick heads up and hopefully something that may enhance your current thinking process. This is of course NOT financial or investment advice. So please be a grown up and know that YOU are solely accountable for every move you make on the market!

As for me? I’m leaning more toward the Trading Rebalancing HODLer type…also Crypto isn’t my only investment. So I continually weigh up my cryptos in comparison to my whole portfolio and also my liquid net worth. And right now, hands up, I’ve got slightly more exposure in crypto than I should have…having accessible liquidity for my businesses is a FAR GREATER priority to me than swinging and potentially knocking the crypto ball out of the park.

As always, context is everything folks. Happy HODLing!

Siam x

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