It all started so innocently. Why not give crypto a try? All the guys at work are talking about it. Shitcoins, ICOs, Tethers, Smart Contracts. You wanted in. It was the Next Big Thing, you fucking idiot.
So you put a little money in the crypto market in 2018. How do you feel today? Portfolio in the red. You don’t even want to look at it. Hodl, they all said. It will come back after the FUD, they all said. And now you’re numb, and depressed, and can’t even afford a bottle of Jack to drown out the pain.
You’ve learned (hopefully) that hodling is bad.
Hodling is like prayer. A lot of people may believe in it, but it doesn’t fucking work. Your assets aren’t protected by God, and they do not respond to the intensity of your beliefs. No matter how hard you believe, crypto-assets just do whatever they do. The market and the universe remain indifferent to your convictions.
In the world of poker, there’s a saying: “If within the first 10 minutes, you can’t spot the sucker at the table, it’s you.” So you’ve been pwned by crypto, Mr. or Mrs. SmartyPants. Somebody else is having a nice Christmas this year with your (actual) money.
But every failure is a learning experience. Hopefully you’ve learned something too. Most successful investors eat shit at the beginning. You know why? Because the ones you’re trading against have already eaten it, and they know how to avoid the same mistakes.
Stop Wasting Your Fucking Time The biggest mistake most amateur “investors” (actually gamblers), make is to fail to value their own time. Like that guy at the office who always boasts that he’s up big money at the weekly poker game. If he had been installing Ikea furniture in his spare time, he’d probably have more money, and at least not be in liver failure from the constant drinking. This is not an investment strategy. It’s just work. In the gambling world, they call it “grinding.”
At a certain point, having more money doesn’t buy you the one thing you will continue to value above everything else: your time. This is precisely the difference between an investor and a gambler: and investor values their own time. A gambler doesn’t. Now, if you’re a degenerate fucking gambler, please, continue to check the crypto market every 5 minutes, and hodl like your life depends on it. There is always an inside straight that you can draw towards.
Go ahead. We’ll wait.
3 Kinds of StupidI don't like to generalize, but I’m going to do it anyway. I think that there are essentially 3 kinds of people in the crypto market right now: Hodlers; Panic Sellers; and Traders.
Despite what you’ve read on Reddit, it’s not really a complicated science. Why do you think Wallstreet is run by a bunch of frat bros who could barely balance a checkbook before they were entrusted with a slide rule, your grandma’s pension fund, and a fat baggie of Colombian cocaine? Trading is fucking simple. Buy low. Sell high. Rinse. Repeat. The less emotional, the better.
Trust me, I’m an economist. We’re never wrong.
Because it’s not a complicated science, I made a simple backtest that shows the difference between a holding "strategy" (that's not a strategy) and a super simple trading strategy (ie: an actual fucking strategy). I didn't consider panic sellers simply because they’re idiots, who never make the right decisions. Never panic sell! Actually, do not buy crypto, fiat, or stocks if you are driven by fear. And most people are driven by fear.
My assumptions start from an investment of $13,000 made in January 2018 when BTC-USD price was $13,000 and therefore you would have had a balance of 1 full Bitcoin. Awesome, let's see how the two investors would end their 2018!
Holder (I really hate the word Hodler as I really hate your species):You’re basically a flat Earther, Tesla Model 3 loving, over-paid, under educated, millenial dumbass. That’s you. You lost 76% of your capital in less than a year. Good job, idiot. Go on Twitter and tell your friends to do likewise. Maybe next year will be the year. Or not. Delete your account.
Trader:It's been a hard year, but you made it. You have a strategy that includes stop-losses and sets a profit appetite. You set 10% stop losses so you sold your BTC when the price was $11,700. You bought again when the price dropped to $10,000 so you had 1.17 BTC now (still not profitable but better than before, right?). So you felt confident and kept placing orders to sell and to buy strategically. If you did as I did, you should find yourself in the table below.
Yes, I am 10.97% up right now. Yes, I made profits during a bear trend. Yes, I am not the only one (whoa!). How I did it? I spent no more than 10 minutes per day in front of my laptop and used a trading bot to place orders as I wanted. "As I wanted" means "as I meant to trade" and not "as a friend of a friend told me when I was drunk in a pub".
Managing your wealth these days is a question of doing simple homework, and not listening to bullshit. Stick with a strategy, do not panic, and (especially) have the right technology to execute it all. If you think that you can outsmart Goldman Sachs with your excel spreadsheet downloaded online and suggested by an investment "Guru", I have a bridge to sell you. Anyone who sells you their investment advice isn’t smart enough to play the market themselves. You’re the one getting played instead.
In 1613, my hero, and the first real economist Antonio Serra said that the quality of people is one of the key factors that will determine the wealth and poverty of a nation. The quality of the people is mainly determined by their common sense and by their ability to survive during difficult periods. You, holder, are the ruin of a beautiful ecosystem. You are the curse of Bitcoin economics. You, holder still have time (maybe) to change your stupid mind, even just to try and to demonstrate to yourself that you can be smarter.
STOP HOLDING, TRADE.
I love you.
