Has bitcoin entered a new era of growth “poverty” with its fall?
Recall that Bitcoin has already lost 80 percent three times and this optics is the current decline just a correction. Sure, it’s a huge drop, but it’s nothing special in Bitcoin’s history. On the contrary, it is likely that an even greater decline will come. It will depend mainly on the big players, they have not started selling yet. If the market floods with a supply of bitcoins, they can send the price down sharply.
Will bitcoin stop being sexy because of its energetic “dirty” nature?
Bitcoin is much less dirty than it seems at first glance. First, it does not use a standard energy mix, but has the motivation to look for excess and often green energy sources that would otherwise escape through the chimney. Secondly, energy intensity will fall significantly in the future. It’s a crucial issue, and it’s good that it’s gotten up, but Bitcoin fans can’t explain that it’s not a disaster. Bitcoin has a lot of questions, but there is no energy intensity between them, it is mainly a communication error.
The dominance of bitcoin in the cryptoworld has decreased significantly. From about 60 percent a few months ago to forty. Does this mean that the importance of bitcoin is there?
It’s a traditional altseason. As the price rises sharply, as in other markets, speculators begin to pack up, looking for opportunities for fabulously high percentages. Many smaller players are under the illusion of rising prices that they are flawless investors and will start building “portfolios” of nonsense. In addition, there will be “door-to-door salesmen” who will strengthen this illusion through various investor groups and clubs, where they share tips on what is growing the fastest. But as a result, they have no one to sell it to, and when the market collapses, they lose virtually everything. Some succumb to the mistake that buying altcoins is “diversification,” which is, of course, economic nonsense as long as cryptocurrene prices correlate significantly.
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Is the bitcoin market, and therefore generally the cryptocurrency market, cheap or expensive? What should the investor do now?
Zoom out. We are higher than at the beginning of the year, we are much higher than a year ago, we are infinitely higher than five years ago. We just used to want fast results from cryptocurrencies. It is pure speculation, greed and impatience. It’s part of investing, but more important things are happening out of price. The Lightning Network is developing, the number of places where fast and cheap payments are accepted is growing, Taproot will soon be coming, Schnorr is coming, hardware wallets like the Czech Vault can do more and more. The bitcoin market is cheap due to long-term fundamentals. It is probably in a bubble for a short time.
How to change or create a cryptoportfolio now and what weight should a crypto have in the portfolio of an “ordinary” small investor?
Textbook lessons talk about ten percent of free money for high-risk investments. But Bitcoin is not just an investment, it contains a story, a rebellion against the system, one goes to the market with a skin against the institutions to which he wants to send a signal. It is important not to treat cryptocurrencies like other investments for more than one percent. First, send a few transactions, rest, enter gradually, invest in security, do not trust any third party. Then it can easily be zero percent for some and one hundred percent for others, depending on how much one identifies with what Bitcoin represents.
What lessons can you learn from the last crypto-crash?
Every possibility of a huge growth must be balanced by the possibility of a huge decline. Zoom out. Don’t jump on waves of nonsense.
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