RE: Are You Committing This Crypto Investing Sin?
I think I'm also in line with what you're saying here.
I don't think Warren Buffet knows a lot about cryptocurrencies because he hasn't really studied them. I say this because I currently work in the financial services industry (closing in on 13 years now). I know a lot about stocks, bonds, and the markets in general. Even so, I recently told my wife that me learning crypto is like a horse-and-buddy driver looking at a new Ford Model T. Some principles carry over. Others don't. It took me about 6 months of study before I even got myself to the point where I could invest a decent amount into any cryptocurrency!
However, I think -- as you said -- there will be a "shake up" in the industry just as there was a "shake up" in the financial markets during the Tech Bubble burst and the Subprime mortgage meltdown. There are a lot of coins out there that are out there because it's cool to have coins; I've already bypassed several ICOs because there isn't a uniqueness (or reason for use) and I'm putting more into some of the larger coin.
Ironically, I have begun to share my experiences -- especially during 2008 - 2009 -- with those in my Facebook groups. In my opinion, the most dangerous thing to an investor -- stock, mutual fund, forex, or cryptocurrency -- is emotion. Emotion will take a normal, everyday person and cause him to put in more than he can afford to lose or make a knee-jerk reaction and pull out -- at the worst possible moment -- during cases of extreme volatility.
From what I've learned, the cryptocurrency space is far more volatile than where I am in the mutual fund space. Hence, it will be even more important for people to plan, stick to those plans, and not let positive - or negative -- emotion cause them to make knee-jerk reactions.
I totally agree with you. I am just trading crypto in small quantities for a very short time and to me, it seems like 90% of the time I made a decision based on emotion, I made the wrong call. I bought into the Hype of some coins and lost some money on those decisions. I didnt bought into the discredit of some coins then they spiked. I sold ethereum for bitcoin because I was eager to have some altcoin profit and because I was scared that Ethereum wouldn't go above 0.07 BTC. It reached 0,1BTC. This was a blow on me because even though I made profit in other altcoins after trading to BTC, I'd have the same as If I would just freaking hold Ethereum...
Its actually conflicting to want ETH price to go down when most of my digital currency comes from mining ethereum, because each time I sell Ether for Bitcoin at "high values", it just increases higher. I'm actually uncertain about what my strategy should be with Ethereum beeing my reference, as 99% of people use bitcoin to compare and ethereums price action seem far more unpredictable than bitcoin's.
I believe this means I didnt have the patience and my fear clouded me from realizing that Ethereum was the only coin in this crazy market that's looking for the next profit that didnt 2X in 2018.
Emotions are your enemy here.
However, they can also be your ally, namely, other people's emotions. There was sometimes where I earned quite a decent profit from coins like Monero when people's hype for verge and ripple was big.
These are real lessons to me.