Why the Crypto Market Always Seems to Let You Down
Unfulfilled expectations
When you entered the crypto market, you found a lot of excitement. Data models predicted riches. YouTube and Twitter told you the market would explode to the upside.
It doesn’t feel that way today, but it should.
Since last summer, you’ve stood on the ground floor of the next leg up, and it’s a whole different experience. Scary. Exciting. Frustrating. Terrifying. Stressful. Hopeful. A mix of emotions.
Big upswings, big downswings. Supercycles and bear markets. Laser eyes and death crosses. Big players moving on. Little players moving up.
Crypto remains a wealth-creation machine, a generational opportunity to build lasting, durable wealth from owning a stake in the financial networks of the future.
It is also a cruel and vicious market. Only the most courageous and persistent survive.
To paraphrase a US general, you may have thought crypto is all glory, but I assure you, it is all hell.
We’ve been here before
In 2019, the market did 4x in six months to kick-start a three-year parabolic run, with upswings of +500% and downswings of +60% along the way.
Do the swings of the past six months seem any more extreme?
When the market zooms for three months, you feel a sense of ecstasy and excitement. You can’t help but put money in—and everybody’s telling you to do just that.
When the market drops for three months, you feel a sense of terror and loss. You can’t help but take money out—and everybody’s telling you to do just that.
Both times, it feels like the right decision. Traders will insist it is.
And if you act on those instincts, you will never get ahead in this market. In other markets, maybe, but not crypto.
Empty promises
Perhaps the traders have something else in mind?
Last year, they told you that you’d get a repeat of 2017. Then, they said you’d get a repeat of 2013. Now, they’re saying you might end up with a repeat of 2012 or 2019.
What happened to $288,000 bitcoin by the end of 2021? Stock to flow says we should be above $100,000 now.
How could so many people say so many things that never came true? How could so many people who were so wrong so many times in the past, now be right?
Maybe it’s impossible to be right or wrong about the future.
If nobody knows what’s going to happen, how can anybody be right or wrong? And even if somebody is right or wrong, how do you know it’s anything more than a coincidence or a lucky guess?
Priya in the park yells “bear market” every time the price dips 5% or more and begs you to sell every upswing. Tony on the TV yells “supercycle” every time the price pumps 5% or more and begs you to buy every downswing.
Eventually, they’re going to be right.
What will you do about it?
Does it even matter? In 2019, bitcoin’s price ended more than 100% higher than it started. In 2020, its price tripled from start to end.
And most people finished down on their investment.
They chased the market. Meanwhile, people who bought in 2018 sold to these newcomers after the price went up.
In January, I published an article begging people to stop dollar-cost averaging blindly. While there’s never a bad time to buy bitcoin, some times are better than others. Just make the most of those opportunities and chill when the opportunities pass.
Buy low and HODL.
Judging from the comments, people didn’t like that advice. Frankly, they hated it and called it terrible and stupid. But it’s worked for me and it’s baked into my plan for bitcoin’s bull market.
With that plan, you’re down as much as 25% but probably closer to even on your investment, possibly up 600% or more.
(For altcoins, you may have a far wider range of returns. I’m down +99% on some altcoins and up more than 5,000% on others. Most pace or slightly beat the overall market.)
Over the long run, gamblers and competent traders might do better. Dollar-cost averagers will probably do worse.
Mark, you still call it a bull market. Why?
Like Richard Nixon did with his dog, I just want to say this right now, that regardless of what they say about my plan’s name, I’m going to keep it.
You can call it whatever you want—I’m sure you can think of some choice words to describe it. (Some with only four letters.)
Bitcoin’s price goes up 100% in bear markets and drops 50% in bull markets. That gives me the latitude to say “bull” and “bear” about pretty much anything I want.
In any event, it doesn’t matter.
With my plan, you will never have to think about bull or bear, right or wrong, short or long. You won’t have to time the market, take profits, or buy the peaks. Ideally, you will never sell (though you probably will have to at some point).
You will simply take advantage of opportunities as they come and let the market do its thing.
That way, this market will never let you down.
Mark Helfman publishes the Crypto is Easy newsletter. He is also the author of three books and a top bitcoin writer on Medium and Hacker Noon. Learn more about him in his bio.
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Good article. It's hard to know who to listen to when buying into the currencies, however if you buy the bottom or what you think k is the bottom and hodl until it rises, you will be able to make some money. Bitcoin is one coin that I like to buy when it's as low as it has been in a while. Usually it pumps after being so low. Even if just a few thousand up. My advice is always buy btc when it's at its low and if you can just hodl for as long as you could. Only invest what you are willing to lose and you won't have to lose anything, if you hodl long enough then most likely when you feel like you want to sell, you will be in profit anyways. I'm going for a ten year plan, buy what I can , when I can and forget about it. In ten years enough of the population should be buying into it that the profits should be large enough to be happy.
Peace ✌️ and Love ❤️ to everyone.
In my opinion buying the actual bottom and selling the actual top is a near impossible without luck. If you can find a system that helps you identify when you are close to either then you're doing pretty good!