The Easiest and Hardest Thing to Do
Do you have the chops to simply do NOTHING?
If you’re invested in crypto, you just came off a rough weekend. Or at least, an interesting one.
The market flash crashed overnight on Saturday morning (December 4, 2021), and many people woke up to news of a stark, incredible sell off of every coin available. So when I say crash, I mean the equivalent of a five car pile-up on the 405 in the middle of rush hour traffic at the start of a holiday weekend in Los Angeles.
Big stuff.
At one point, Bitcoin lost over 17% of its value in the space of approximately five hours, and the rest of the market sold off right along with it. So called altcoins (everything that isn’t Bitcoin) dropped faster and further than Bitcoin, with many experiencing over 20% losses. Analysts estimated over 300,000 leverage traders were liquidated in the blow up. Once the exit began, it didn’t stop as it took down huge projects, no matter the underlying value.
It was red, it was bloody, and everyone was wounded.
Shiver.
I saw panic everywhere across social media. “Cryptocrash” trended, financial journalists rushed to declare that Bitcoin had died (again), the bears gloated, the bulls cowered, and people typed frantic messages to each other in Telegram groups asking a resounding, “WTF?”
And then the market started to rebound. Temporarily.
I was listening to an “emergency press conference” on Twitter Spaces when this began to happen. I heard the host go from giving a motivational speech to almost laughing in the space of about 90 seconds as he realized at least some value lost had started to come back into the market.
Again, temporarily. That’s crypto for you.
“Just like a rollercoaster” is such a trite and cliched phrase, but it’s a good analogy. You’re up, you’re down, you’re flat, you’re… hanging onto the side of the car for dear life?
The easiest thing to do during a moment like that is just to hold. Do nothing. Close the app. Shut down the computer. Walk away. This is also the hardest thing to do because it means trusting your gut while everyone screams about incoming mortar fire.
Collective hysteria is a powerful force and there has been a lot of it the last week or so. Right now, nobody knows which way is up. Is this a bull market? A bear market? A sideways trading quagmire? One person claims to know what’s happening. Another makes a video with the opposite take. A third sides the with the first… and so on.
Nobody knows the future.
But I have a theory about why this hysteria is especially strong when it comes to cryptocurrency. It has to do with time. Time is our friend, and our enemy.
Right now, it seems like the latter.
We’ve only got a little more than a decade of information about this asset class. Simple as that. When compared to other assets, that data is a speck of rice. It’s nothing when compared to charts about stocks, gold, silver, and even the US dollar.
That doesn’t inspire confidence. That inspires fear.
And there’s always a little bit of fear lurking around Bitcoin and the rest of the sector. Fear crashes the party even in the best of times, when the champagne flows and people declare their Lambo purchase is right around the next corner, along with a house in Dubai and a yacht anchored in Palm Beach next to whatever Michael Saylor floats around on these days. Fear follows all of us.
In crypto, a little devil dances on everyone’s shoulder and chants, “What if it goes to zero? What if it goes to zero? What if it…”
What if it does? What if one day, the whole asset class is worth nothing?
Then we all get wiped out. The folks who don’t believe in crypto, the normies as they say, will get to gloat that we should have stayed safe by keeping our money in the bank or underneath the master bed mattress. Some people will have to leave the market forever. And that sucks.
Even for Michael Saylor. Especially for Michael Saylor.
For the record, I think a complete wipeout of the market is unlikely. Too many people have a stake in this now. Crypto is here to stay. The world has embraced it.
But here’s one thing I know: if Bitcoin does go to zero one day, then at least I tried something new. At least I dared to answer the question of what if. And at least I took a step to stop the bleeding I’ve been unable to stem most of my adult life—the kind that comes from being invested in a financial system designed to take my wealth while making me believe I’m keeping it.
Those things matter too.
The big banks, hedge funds, and global financial oligarchs have played us all for fools. They’ve done it for decades. We can smell it. Taste it. They took advantage of all of us during the Great Recession, the Dot Com bubble, the saving and loan scandal, and all the times they said things like, “Take out this high interest student loan, kiddo, it will do you some good. Don’t worry about how you’ll pay for it once you get out of college. It’s an investment.”
I could go on and on with this list. I don’t need to. You get it.
So yes, I bit down on Saturday morning. I stared at Coin Market Cap in shock for a few minutes before locking my phone and hitting the gym. As I ran on the treadmill, I reminded myself that 95% of my portfolio is invested in projects I believe have great futures. Then, I went about my weekend. I woke up on Monday and was damn glad I hadn’t done anything out of panic.
The market was slowly rebounding, and off the worst of the lows. Imagine that.
The Crypto Connection is for entertainment purposes only and is not meant to be financial advice. Please do your own research before investing in any asset class. Sara Celi is not a financial advisor, and holds several cryptocurrencies. To purchase her books on Amazon, please click here.