Two nights ago on December 16, 2020 I received several messages asking me if it was too late to catch the bitcoin boom. My total answer was, “If you have to ask then it’s too late.”
With all the trading and investing comes the question of suitability. For example, it is never a good idea to invest your house deposit on speculation. Never. It may have been a highly profitable craft but you can never know and if you can’t afford to lose you can’t afford to play.
But is this the right time to buy bitcoin?
The answer is the same as it is for stocks. Yes, there is always the right time to buy stocks. If the world seems to be ending, now is the right time; if stocks appear to be in a bubble, now is the right time to buy stocks. If the market is mentally boring, this is still the right time to buy stocks.
This does not seem possible, but that in itself is a clue that it is the right thing to do because you can be sure, as a jungle floor carcase, that any obvious source of profit has already been swept by hungry predators.
Unless you are a highly skilled practitioner – and many more think they are than people really are – then the way to buy assets is to buy them in regular chunks. It’s the foundation for dollar-cos averages, which is a great way to build wealth if you’re not going to become a screen-glued market fanatic and complex math and plumbing market microstructure ‘ deep.
If you buy regular small pieces of bitcoin, it’s always a good time to buy bitcoin if you think bitcoin has a great long-term future.
In the end, the way to invest is always to answer the following question: Is the market for the asset you want to buy in the long term increasing? If you don’t know, you’re not involved. If you see outstanding long-term potential, you regularly buy regular amounts and relax whether the short-term asset goes up or down or sideways.
You would only sell if you change your long-term view of the asset. If you don’t change your opinion then buy and hold and buy the dips if you want to get spicy.
This is absolutely true of bitcoin.
If you want to buy now because you missed the $ 10,000 to $ 23,000 run, you might as well go to Vegas and put all the cash on the red with an eye to double your money by being on the right side of luck . If you know why you want to buy bitcoin now and you’re in for the long run, then start buying small chunks every now and then.
If you want to kill, that’s understandable, but to do that you have to buy low and sell high and bitcoin is not low.
If you want to make a killing you need to put skills on DeFi because that’s where Goliaths is tomorrow, and it will emerge. Unfortunately you can’t get on the kill list. Investing and more so trading is a skill game, the only sport in which you can make yourself rich while you’re sitting in your chair. Unfortunately, like any sport you have to practice a lot, know your craft and have the best equipment, focus and dedication. It takes time and grit, which when it comes down to it is the exact opposite of FOMO (fear of missing out).
Make sure FOMO kills. So usually, if you feel FOMO, you know this is not the time to get involved and the FOMO is knee deep in bitcoin right now.
But most don’t worry about what is a sensible way to move forward, they just want to know what bitcoin is going to do next. Well here are my latest versions of the graphs I’ve been publishing here that have been calling this move.
They are not destiny, you can only use maps of a possible future to see if bitcoin stays on a great bullish trajectory.
This is what drives my thesis.
November 5, 2020:
December 7, 2020:
The thing to remember: this is no fate and tomorrow BTC could be $ 10,000. A “can” is not the same as a “will,” not even closing.
An entire class of math is based on the implications of a captain sailing across an ocean of unknown size in impenetrable fog, and how that captain can estimate the distance to the next shore. That’s a great topic to understand but it doesn’t bring the coast any closer or make the fog less dense. It simply reduces the need for changing underwear.
This is the ocean we find ourselves on now and if it progresses in a fractal way this is where it will tend to be the boss, but … bitcoin is just the tip of a crypto spear, there is a continent of opportunity first with x100 untold stories to write.
So with FOMO bothering you, you should look past bitcoin. But what about ethereum? If bitcoin doubles, ethereum could easily quadruple. What about DeFi, what about NFT, what about it after that, which is coming?
There’s a decade or two of opportunity coming up in crypto, so if you’re dripping with FOMO, take a cold shower and get to work scaling, because if let FOMO take hold, the following will happen.
You buy at $ 2x, 000, bitcoin drops 20%, you sell in terror, it bounces, you cry with sadness and frustration as it runs out, but your money has disappeared and your emotional wounds are bleeding. You never invest in crypto again.
Over the next ten years, crypto is going from a $ 500 billion asset, based on cryptocurrencies, to a $ 50 trillion industry based on a constellation of revolutionary new software that pervades the current world ‘ the internet is doing it now but because FOMO scares you, you stay away. and you gain nothing.
Don’t get FOMO, go strategic. That’s where the wealth building is found.
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Clem Chambers is the CEO of the private investor website ADVFN.com and author of 101 Ways to Pick Stock Market Winners a Cryptocurrencies Trading: A Beginner’s Guide.
Chambers won Journalist of the Year in the Business Market Commentary category at the 2018 State Street UK Institutional Press Awards.