If we look at the cartoon coin riding the roller coaster there are a number of take aways we can glean.
1. At this point in the ‘game’ if you’re not up for risk than what are you doing here.
2. With this risk there is still incredible gains to be made, if you can ride out the losses.
3. It’s fun? Or, it will be fun? Or ‘oh yeah’ it’s crazy fun!
Yes, investing can be a RIOT if you read the gains correctly. It can rip your heart out if you watch those gains vanish. The worst part about the vanishing is the mere discussion by some far off bureaucrat announcing that more regulation is needed to minimize the risk. Ha! The very announcement just increased your liabilities and exposure to risk.
Nothing I’m saying is new or surprising, infact, by now it’s boring. So what am I writing about?
It’s new. It’s like the heady days of the Internet in early nineties, or the automobile at the break of the 1900’s, when you could go outside in Detroit and see an automobile on your ‘road’ and the next day see 2, in that period of time the total number of automobiles in your neighborhood had increased by 100%. For you to get involved in that crazy venture would have been incredibly risky, but riding it out for the long haul would have been worth it.
‘Sure’ you’re saying, hindsight is 20 / 20. I know. It’s the same with the Internet, and all those ‘fad’ ‘websites’. Fad. Yep, the 2000’s hit with a bang, and a great deal of people lost their lively hood forever, or for a long while. BUT! The fundamentals were right. The system had merit, the people were interested, and it prevailed. In fact, it prevailed beyond our wildest dreams!
The cryptocurrency phenomenon has a tremendous amount of critics, doomsday announcements, and out and out pronouncements of death. Every one of them could be correct. However, sometimes it feels like ‘thou doest protest too much.’ Not that the protest doesn’t have merit, it’s just that the protest conveys fear of change, and/or fear of breaking the norm. The norm that has worked out so well for those protesting. It almost feels like the risk takers are smart, possibly smart like a fox. At least, maybe smart like a long term investor that sees possibility. Because that’s the point right? With BTC, ETH, XRP, BTC etc. that’s what there is. Possibility. It’s new and shiny, and it breaks all the rules. In fact it breaks so many rules that many people see it as a scary wild animal, an animal that needs to be tamed. Well, none of these investors planned on taming the animal, they just want to get on while they can still take the ride.
Bitcoin is perpetually rising and falling in relative fiat value, and even early 2018’s 70% decline isn’t surprising, nor is it the worst ever witnessed. Even amidst the most sickening of freefalls, experienced traders remain unfazed, because they’ve been there before. Holding through a correction is almost a rite of passage for cryptocurrency investors, and the group’s most experienced veterans have endured more than their fair share over the years.
This last week, Ellen DeGeneres’ decided to talk about bitcoin, if you’re as old as me you’ll remember a very similar experience in 1994 when the ‘Today Show’ asked ‘What is the Internet Anyway?” The resemblance is so close it feels like deja vu. We’re here. We’re in the mainstream. In fact, the valuation craziness will probably be defined by what happened in late 2017 and the year 2018. Not because things will slow down, but because that was the year when talk show hosts took notice, and started trying to say words and phrases that didn’t make any sense to them. They had to though, because the news had reached a point where it landed on their desk, and their listeners were asking naive questions like ‘what is this crypto thing that people make money off of?’ ‘What is mining?’ Ellen handled it.
On her show this week, DeGeneres compared Bitcoin to a baby goat, as well as a movie with a super-confusing plot.