𝐓𝐡𝐞𝐫𝐞 𝐚𝐫𝐞 𝐧𝐨 𝐦𝐚𝐫𝐭𝐲𝐫𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐦𝐚𝐫𝐤𝐞𝐭, 𝐨𝐧𝐥𝐲 𝐫𝐨𝐚𝐝 𝐤𝐢𝐥𝐥𝐬.
The market is not a place to create a revolution.
The market is not a place to create a revolution.
A few years ago, we saw the $GME (GameStop Corp.) debacle. Some investors started noticing that this boring, underperforming stock had been short heavily by hedge funds. They tried to rally investors into buying the stock. This made the stock rally which led to a short squeeze where the short sellers were forced to close at a loss which further fed the rally. That was fantastic foresight from these investors, among whom was a fellow PI and friend. I won't tag or name him here, because I don't know whether he agrees with the opinions I am sharing here and I am not speaking on his behalf. He is an eToro legend though. As the rally got underway, a slogan emerged. The HODLers were out to teach the hedge funds a lesson. They encouraged people to keep buying and HODL on. Many got caught up in FOMO.
When my friend sold his position at the peak, he got a lot of abuse for being a sell out and for failing the revolutionaries. He was among the few who made money during that whole episode. Those that fell for the war cry lost money. There was no honor for their courage to hold on. They were just the last fools.
Today we see similar war cries from crypto investors. The revolution is near, if you believe them. Some say $BTC will replace the $USDOLLAR . The more delusional ones, those that are even more greedy, will tell you that $BTC will decline in importance and altcoins like $XRP and $DOGE will win instead.
If you look at the reality though, the US continues to retain a lot of dominance on the world, both militarily and economically. It would be foolish for the US to voluntarily give up their hegemony by voluntarily embracing the crypto-currencies.
Michael Saylor, the Executive Chairman of $MSTR (MicroStrategy Incorporated) is lauded as the leader of the revolutionaries. $MSTR is viewed as a relatively lower risk exposure to $BTC but it is exactly the opposite of that. A quick look at the financials of the company reveal that it has been making losses quarter after quarter. The $BTC purchases are funded through debt, with large interest rates. The quick ratio of 0.65 suggests that the company may face challenges in fulfilling their short term obligations. It is a poor investment as a business and essentially it is a leveraged position on $BTC. If you must buy $BTC you are better off buying it directly.
Don't get me wrong. I am a not crypto-hater. I am professionally trained in Computer Science and have a strong understanding of the technology and appreciation for the philosophy behind decentralized peer-to-peer systems. I think it a brilliant use of technology and could someday be useful as a store of value in place of $GOLD. But I don't think it is a good investment asset, at least as of now, for multiple reasons.
First of all, no one is interested in Gold or its alternatives. Our economy has evolved and today there are other investment assets that outperform Gold. Secondly, the more interest crypto-currencies garner, the more volatile they become and that hurts their eligibility as a reliable store of value.
I don't have a problem with people trading on crypto-currencies, the same way in which I don't have problem with people gambling with their money. I am only writing for the new investors who fall for the narrative and FOMO. Trust your common sense, no one knows the future. Don't fall for confidence projection, which is a common trick used by con-artists.
If you really believe in crypto-currencies you should buy some, put it in a secure hardware wallet and forget about it for a few years. If you want to trade in it, you should do it knowing well that you are gambling with your money and not taking part in a revolution.