You Can Just Imagine
The typical no-coiner narrative is out in full force again with a heavy force of “I told you so”. However, this was predicted by every Crypto investor who understands the game. I am not talking about the collapse of FTX and others, but rather, another bear market with heavy drawdowns. This dynamic is to be expected, and somehow no-coiners are unable to process this level of thought. In the mind of a no-coiner, an investor invests capital and then continues to see uninterrupted growth during the period of investment.
No, that is not how it works in Crypto, and never has, for the past 13 years. As I mentioned in a fairly recent post, “If you don’t get it by now, you probably never will”. You could reason that the majority of no-coiners are simultaneously not traditional investors either. If you take a look at the FAANG stocks, as well as every other traditional stock, you will note the tremendous losses that have occurred during the course of 2022. However, despite the fact that many consider Crypto investors lucky, it’s far from the truth.
What we are currently watching unfold is rather similar to 2018. Actually, in terms of percentage points, things are actually looking a lot better. However, we are not done yet. The positive side to assets being “hacked” across the various FTX exchanges is that there is nothing to liquidate. These assets are likely to be distributed over time. I am not even going to give my opinion on what I think is taking place here… this fiasco is literally unbelievable. As Crypto advocates, we simply apply the same dedication and mindset we did in 2018.
These Crypto People Are Crazy!
Regardless of the Crypto cycles and everything else that plays out in a fairly predictive way, there is another angle here. If Crypto really is the future then it has to materialize at some point, and with significant force. If that be so, then there is more of a blessing here than is initially realized. When you begin talking like this people begin to lose it. The average person is truly unable to think like this. It’s true, even extremely intelligent people will laugh at this, which is why they never make bank. They laugh at you today and call you lucky tomorrow.
I won’t even address previous bear markets, but rather make mention of the covid crash. I watched that crash unfold right before my eyes. I have never seen such a violent daily candle, ever! I was in some leveraged positions and had to fund my accounts fast. The only problem was that the networks were so congested, I was unable to receive my capital in time. I am not talking about a delay of an hour or two. The majority of those transactions cleared the next day. That’s right, some taking as long as 24 hours to confirm. This obviously led to liquidations.
This was a soul-destroying blow, especially as it was actually avoidable. Even if the transactions took an hour to confirm, I would have been fine. So, what did I do? I bought more! I bought fewer coins than what I lost. However, once 2021 arrived, I was up approximately 70X, in fiat terms. In essence, within a year, all was recouped, as well as a hefty surplus that was life-changing, for me anyway. If you believe in what you are doing, you continue, regardless of narratives and opinions.
The Silver Lining
It is broadly considered that the FTX implosion has set Crypto back by two to three years. Regardless of how long this turns out to be, one thing is certain, I now have more time. I am an investor who is somehow mixed with a “builder”. I build income models and enjoy structuring investment ideas. Building when materials are cheap is a no-brainer, one that perhaps no-coiners are unable to understand, but a no-brainer nonetheless. It does however put a lot of pressure on my current situation, but the potential long-term benefits outweigh the challenge.
This will be a testing moment for many. Some will fall away, as this is likely to be a somewhat dark time for Crypto. However, considering how chaotic the world has been of late, you never know. People have become more accustomed to tragedy and craziness. A lot will rely on regulators and the media narrative. You know how the story goes. See you next time.