Don't be like Bill.
Bill bought AMZN when it was worth $100 a share, then he sold it for $5 when it crashed, don't be like Bill.
Back in the late 90's a tech company emerged on the scene that was going to change the world.
They were going to make all other brick and mortar retail stores obsolete by using this new technology called the internet to reach buyers and sellers everywhere.
Even from the comfort of their own living room!
For this reason, the stock shot up.
Climbing higher and higher and higher.
Starting from a base around $3-$5 in 1998, climbing all the way to over $110 in 1999.
(Source: https://twitter.com/crypto_rand/status/964436734477066242)
All this because it was based on an exciting new technology that promised to change the way we do... just about everything.
After the excitement wore off, and it was realized that it would still take years before this new technology was able to be used the way many envisioned, the price of the stock plummeted.
Does that kind of scenario sound at least somewhat familiar to something that might be going on today?
I think it sounds very familiar.
Bitcoin is not Amazon in any way shape or form. They are completely different things, that is not what I am trying to compare here.
I am trying to compare the psychology and sentiment that often surrounds new technological innovations and the effects it has on prices.
Both Bitcoin and Amazon are/were based on an exciting new technology that hopes to disrupt just about everything we do.
For that reason prices shot way up, and are/were currently very much in "bubble territory".
That sounds very much like what is going on with Bitcoin today.
Yes the technology is revolutionary, yes the potential is there, yes it solves a lot of problems, however the technology is still not there for real utility beyond a digital store of value, YET.
For that reason, I would not be surprised to see history repeat in regards to what happened with the dotcom bubble.
At some point there is likely to be a reckoning that takes prices way down.
Not just of bitcoin, but prices across the board.
I am not sure what will be the trigger, but if history is any indicator, this is something that should be expected as new technology often goes through boom and bust cycles much like what we saw with Amazon.
Prices tend to get way ahead of themselves as people think of all the possible applications only to see prices eventually be reigned back in to better align with reality. Then, eventually, the real technological innovations emerge and much more accurate pricing results.
If Bitcoin is following a similar pattern to what we saw with Amazon and the dotcom bubble, what might happen from here?
If the past is any indicator, we could see Bitcoin still make two new highs before this price reckoning takes place.
This is a chart of the Bitcoin price action overlayed on the Amazon chart from the late 90's:
(Source: https://twitter.com/business/status/963554149366460417)
Not saying that prices will follow exactly this pattern, but there is the possibility.
Again, I would like to make this clear, I am not comparing Bitcoin to Amazon per say, I am comparing similar price action, psychology, and sentiment within a new technological innovation.
What is being compared is not as important as the psychological component that is reflected in terms of price on the charts.
What is the take away in all of this?
There is likely to be a major price reckoning coming, probably even greater than what we have seen thus far.
If you are sitting on healthy profits, don't be afraid to take some along the way so that you can buy back in when things aren't looking so hot.
Don't be the guy that sells AFTER prices are already down 95%.
If history unfolds in a similar fashion, we could still see two new highs on Bitcoin before this happens.
And finally, and most importantly...
After falling from $110 down to $5 again, AMZN is now trading for $1,500 per share. So, don't be afraid to just HODL. ;)
Stay informed my friends.
Follow me: @jrcornel
poor Bill!
Anyone selling now is going to be really missing out a year from now when the rest of us are Riding High.....
The upgrade of selling and buying is trading. Trading is using TA knowledge to predict the movement of prices. and then buy low and sell high.
A similar point was made at an investment conference I went to last summer, though it was in the context of advising investors to hold on to their good stocks and not give up on them too quickly. The advice is even more applicable to the crypto markets which are much more volatile than the stock markets.
While the corrections can be pretty scary, each time the crypto markets have come back and made new highs. We're not at that point yet following the most recent correction but have bounced back quite nicely and I'm optimistic the markets will continue to go higher.
I think the main keys to being able to HODL during a nasty correction are the following:
Don't invest money in cryptos you can't afford to lose. If you're gambling with the rent money or money you need to pay for your kids' education, you will become a nervous wreck and have trouble sleeping at night.
Do your research and invest only in cryptos you understand and that offer a good value proposition. Most cryptos will eventually be worth nothing, but if you're confident you're holding solid cryptos with good teams and legitimately favorable prospects, that provides confidence that their value will recover and go higher despite a correction.
Diversify among a basket of good crypto assets. You don't have a crystal ball and can't know with certainty which cryptos will remain standing like Amazon when the dust settles. Spread your bets. If one or two of your investments become the next Amazon, that will more than make up for your losers and provide you with life-changing wealth.
Great comment!
Thank you. I really believe blockchain/distributed ledger technology will transform our economy at least as much as the internet did and will offer people a chance to earn life-changing wealth in the coming years, but people need to smart about the way they make their investments. At some point, just buying random cryptos will not work anymore and people will lose their money if they buy into scams.
Bravo comment!
When you want to Flag them but see their Steem power lol
For me there is a simple rule how you can save yourself from selling after 95% lost: Never Never Never ever buy with money you can't spare. Thanks for that high quality article. I love it if you compare history with presence.
Keep going!
That is very good advice. If you are already using money you can afford to lose, likely no chance you lock in a 95% loss.
Exactly. That's the Point. Good conclusion!
Exactly, and never sell at a loss, especially if that loss is massive. Might as well hold to the end at that point.
Great Advice! Any long term holdings should be money you are willing to lose 100%. All these people selling are either traders or the ones that put too much money in crypto. If you believe in the tech, just hold. Otherwise, trade and buy back at lower prices. Though, if you are new to trading that'll be hard. I don't advise anyone to trade unless they want to learn to trade professionally. Almost all new traders lose money. Takes years to develop the skills needed to be profitable. Crypto is a good time to start learning though ONLY after the bear trend ends.
JRcrypto
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This might mean that Bitcoin has not seen the worst of it's days. Blockchain and it's underlying concepts are still a new technology and it still hasn't matured as a product for the average user. And even though we experienced a bubble last year and some minor corrections, a serious market crash might be somewhere arond the corner
please tell me BTCUSD next target up said in 3 to 6 months
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Bitcoin and blockchain aren't going anywhere,
We've just survived one of the largest crypto crashes in history and while prices might still go down more from here short term, the future is bright, in fact I just invested $1k into Steemit.
Btw in case I haven't made myself clear, I'm bullish.
Haha, as am I. Glad you decided to invest into Steem and Steemit! It is one of the few platforms out there where you can Keyboard Mine your coins. ;)
I like the keyboard mine analogy! Very true!
Bitcoin is slow and consumes alot of power it has no future in reality. Whole blockchain consumes more power than Denmark. Unless they change it drastically it has no future, also transaction fees are ridiculous witch beats the point of its existence as well.
It will be interesting to see what happens when/if the Lightning network gets implemented.
Hello Guys how are you all ! Am new on steemit so like , comment and vote please , Am very happy to join this
network help me to get more followers and votes i also do follow back comment and vote you ! Thanks lovely
Guys.
And one thing more also resteem my post in your friends.
Have a good day.
Buying in $100 and selling in $5 is the worst decision you can make in any trading whether it's crypto or stocks or anthing.
yeah,holding would be more appealing
Agree that the initial excitement surrounding a new technology inflates the market price but once the development catches up and the tech shows real utility it's a done deal. The Blockchain no doubt is following the dot.com trend and will prove itself to be legit despite all of the naysayers.
Upvoted and new follower here! Thanks