say Hi to Bomba for us.
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No idea.
USD (based on cycles) wonāt be good to hold next year. Itās on its journey of break down again after much of the year range trading. But based on previous cycles, it is likely to begin tanking around January after the US election then recovers later on in the year. But it may not. 2020 had covid as an intervention which screwed with cycles.
Right now, crypto is not a currency. It can be used in such a way. You do hear of people buying a house with bitcoin, but Iām not sure how that transaction works because itās considered an asset so Iām not sure if itās changed into USD, AUD before or after the transaction. Or whether it is held by the seller of the house. It is an asset, so they will be paying capital gains on it whereas if itās held in AUD, you donāt pay capital gains on the increased value of the currency. Yes, Russian oligarchs got around to Bali by some form of crypto because rubles werenāt accepted. Yes, there are countless scams. I donāt really care what other people do with it. All power to them.
I think the idea that bitcoin will become a currency thatāll remove the need for other world currencies is decades away. And in all honesty, a lot can change between now and then so thereās no point worrying about something so far away.
I donāt care whether itās a currency or not. It has repeatable cycles and provides the opportunity to trade off it and gain returns. If youāre into investing thatās what is important to you. The returns. Not the use, or the ten year sustainability of how it transforms currency, or that millions of Chinese are slaving away in a factory making a shoe that costs $5 to make but someone is willing to pay $450 for it, etc.
The best thing bitcoin (or moreso blockchain) has done for our day to day lives is helped change the way banks operate by allowing faster transactions.
If you want to trade in crypto then you accept the good with the bad. Just like shares. Just like property. Just like anything you spend money on. You deal with the fees. You deal with taxes. You deal with the government intervention and changes along the way.
If itās really draining on you that crypto could or couldnāt become a viable transactable currency and halting you from trading, then donāt bother. Go with ASX shares. Go into property development. Invest in renting out storage thatāll return x% compounded over a certain period of time. Thereās plenty of other alternatives. With good sustainable growth across different time periods. With plenty of positives and plenty of negatives.
Itās good that youāre asking such questions. But I truly donāt think they should change whether you trade or not in crypto during this cycle or the next one. Assuming youāve done enough research into the cycle of coins and know what to expect in the upcoming 4 to 5 months. Doesnāt mean itāll work out exactly the way you expect it to. But if you have a backtested baseline of what to expect along with probabilities of what may occur based on history then you stack the odds more in your favour of coming out well from it. And if it doesnāt happen the way you expect it to, have an exit plan so that the damage is minimised and learn from it.
Iād be more interested in what the cycles are, what the trends are, how to spot them, what part of the cycle are we in, when to expect corrections, price and timing issues, etc to tilt your trading returns in your favour rather than what the adoption of a new currency will mean.
Bitcoin should be worthless also, it is a hype driven currency and hardly able to be used.
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Yeah.
I donāt like trading at night. Even during the day.
Tried scalping. But donāt like it.
I have some friends who do incredibly well out of it.
But itās not me. I donāt like sitting in front of a computer for 4 hours watching a trade that closely.
I did components of it earlier this year with good returns. Just used the one lot of capital, put it on a trade, removed the capital and let the rest run whilst shifting that capital elsewhere. Then came the drop in March. There were signs leading up to it, but I ignored them got confident and greedy and paid for it. I learned from it and adjusted what I was doing to suit. And put a huge focus into backtesting what I plan to do and try and plan for the next week and month rather than be so reactive.
I know a few people who use bots to trade. I donāt like that either. I prefer doing my own analysis and research and working off that. Then allowing trades time to evolve. It means I miss out on XRP moves like the last 3 weeks, but I donāt feel the need to FOMO into the trade because the ones Iām already in are doing well enough for what I want to get out of investing. I also have a good understanding that after the moves since early November, there is bound to be a decent correction this month or next month. So thatās the time to let stop losses do their job and rotate into other investments, not now.
Alsoā¦
The accounting on the trades I do is cumbersome as it is. I have to take into account the exchange rate and other factors. If I had to do it on scalping trades thatāll just make it tougher (being fully aware you can pay for the accounting to be done for you).
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I could buy a house in sheep if someone was willing to trade.
I guess your right, Iām trying to understand the utility of a crypto currency but really itās like buying gold or a derivative of.
It has demonstrable scarcity, security and an an ability to be traded.
Like how art from a deceased artist keeps going up in price even though thereās plenty of new art being created.(that subjectively has just as nice as aesthetic and value for what it looks like)
Crypto is kind of the same. Theres plenty of coins being created but the value of existing coins continue to appreciate - because they themselves are unique.
I guess if you owned a particular coin that all of a sudden wasnāt able to be traded. Well that would be the death of it and its value.
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This happened earlier this year. A few coins combined. Another one changed its ticker.
Itās annoying because Iām trying to track its history and trends across time and trying to find that data makes a difference. Different exchanges will decide to discontinue a coin at a particular time. The exchange I use doesnāt hold all crypto, so I just worry about those coins, than worry about the ones on other exchanges. They will also halt trading on it too.
Itās happened to me on ASX shares as well.
There are plenty of road blocks in the way of investing. You just try and weave your way through it, learn from your mistakes or what you saw at the time of the trade and adjust to the conditions at play.
The question you ask are the same my brothers have asked. And I tell them not to bother. I donāt think they can handle the ups and down of crypto. It seriously messes with your mindset.
One of my brothers tried putting money into some coins. I asked him why he invested in it and he said because the trend looked good and he felt if he held it long enough, itāll catch up to bitcoin. Bitcoin is now $100k from around $18k when he invested in his coin. The coin he invested in is worth 10% of what he paid at the same time.
Whatever your bias is coming into trading, try and identify it and find a way to minimise it (or at least work out if itās reasonable or just bullshit). Trade the chart, not your bias and certainly not narratives.
A massive part of utility is freeing up the Trillions in Nostro accounts around world which are held for currency transactions by providing liquidity in blockchain transactions.
Bitcoin will not be used for this as the gas fees are to high, and it crashes when too many transactions go through at once.
I can stomach the ups and down of an investment.
But Iām traditionally a value investor. Buying and selling.
Ie in value buy, over valued sell.
Still been burnt on the latter and some the former.(just have to wait it out - but the opportunity cost is something).
I havenāt invested in Art. But I think crypto might be something thatās easier to understand and worth holding.
My assumption is that the thing that would destroy the crypto market is if there was a technological weakness in Bitcoin or maybe the next largest coin that undermines either its scarcity, security and tradeability.
If those three characteristics remain strong then it will retain value(not to saying itās not overvalued now)
Ie if Bitcoin went under a lot of technologically superior coins would go under too.
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The market is split between tokens that have utility and those that donāt. The sheer amount of non utility tokens or meme coins that is hitting the market is extraordinary - 10,000 new meme coins per day are minted on the solana blockchain. This activity has been a large part of this cycle (in 2021 it was NFTs) this is the raw casino element of crypto and brings a lot of people in to gamble and have a bit of fun. Now some of these tokens reach very large market caps and have engaged communities and have some staying power however 99% die a quick death. But ostensibly they are all competing for attention.
Then there are the tokens that have genuine utility or are trying to build something of value and they range b/w layer one blockchains, scaling solutions, decentralised finance, AI, gaming and more. These again are often competing for attention.
Personally as an investor in this space Iām not looking to pick a random coin to try to 100 x. Im not looking to pick the best new piece of tech before its widely understood. Iām looking to invest in a protocol that has proven market fit. That is growing market share, that has demonstrated an ability to scale, that has an advantage against its competitors etc. from that perspective itās no different to investing in a business.
This is why I try to keep it pretty simple. I donāt know which will be the biggest winners in this space, however I believe the market will grow significantly over the long term and I believe most of that value will accrue to a relatively small number of dominant winners. I personally own Bitcoin, Ethereum and Solana. The market is telling me they are the dominate players so they have my capital and Iāll change my mind and alter my investments based on evidence of that dominance changing or continuing moving forward.
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Value buy and value sell depends on the time of your investment.
Bitcoin was a value buy a year ago. And you could sell now. Or hold until the end of the cycle.
It could also be a value buy now if you hold it for 5 months and take whatever it gives you. It might be a x2, it might be a x1.5 it might be a x2.5.
If youāre holding for 2 months, it might not be worth it. A correction is coming which may give back some of the gains you get between now and then.
It also may correct by 30% and not recover as well as intended and only return 20% overall. You take what it gives you. Prefer that to watching it drop by 70% over the year after it.
There is over bought and oversell signals. But Iām not sure how to trade off them yet. Something as popular as bitcoin can stay āover soldā for a month at a top. And it can sometimes look like another accumulation for another leg upwards. Other times, it can look like distribution and capitulate. You donāt know whether youāre in an accumulation or distribution trend until after the fact.
The āis it worth itā question is too individual to answer. And really points back to the main goal of why youāre trading to begin with.
What I have found interesting is there are many ātraditional macro investorsā that have come into this space and are very pro bitcoin. Even legends like Paul Tudor Jones, Stanley Druckenmiller are proponents. However that really is Bitcoin specific and a hedge against money printing - Bitcoin acting like a digital gold proxy.
Always trading to make money.
That the effort is worth the reward.
Itās clear that the current rally is based on improved tradeability.(regulatory approvals, crypto fans in politics and activity - movement of value around the world legitimate or otherwise- ie itās being used as a currency).
Anyone who says crypto isnāt a currency is deluded. Anything can be a currency. If someone is willing too exchange it for something else of value.
Tradeability events seem to be what drives the price rallies.
The security and scarcity of crypto hasnāt been undermined in 10-15? Years since itās kind of been popularised?
I guess thatās the black swan event that investors hope they donāt wake up to discover has occured.
peoples understanding of utility has changed.
And a lot more have jumped on the ETFās/
You donāt carry around your money in in paper notes.
The bank doesnāt even have your cash on hand in a vault, its been on lent and then some.
Its just a promise that your bank will give it to you when you go to withdraw it.
if you look at crypto the same way it makes a little more sense.
No and I have very little āmoneyā.
Instead I have assets and a capacity to earn money.(or earn assets).
Banks trade in money to keep liquidity in the economy.
Thats the problem with crypto.
Money has to have its value stabilised so that it is suitably liquid enough that people will spend it. But not too liquid that they wonāt save it all at once either.
Thats why traditional money(not currency) has to be fiat. So the economy can be managed to keep well the world spinning.
Thats how I understand money anyway.
Money is used as a currency because thereās no real great incentive to hold it.
If you have some your better off spending it on, necessities, something to enjoy or something which will appreciate more greatly in value over time.
(Or paying off someone who has lent you some and is charging you a rate of return on it. Eg a bank)
I was always fascinated with investing, however the real catalyst for me doing this permanently was selling a business and getting a chunk of capital. If I could learn how to invest that capital well I didnāt have to go back to work and that was a significant driver.
I spend 4-5 hours a day reading or listening to pods about markets, technology, macro economics and any thematic Iām particularly interested in. Also a ā ā ā ā load of quarterly reports. Iām not a great analyst so I find the detail tiring, Iām better with themes than putting together discounted cash models. I donāt stay up all night as Iām not trading short term. When I buy a stock I hope to own it for years.
I invest in the US, and I would encourage anyone to focus on that market itās just completely non comparable to anything else with such wonderful companies and huge capital in their private markets.
I subscribe to a bunch of people I respect, Iām in a few investing clubs including an angel investing group. Itās completely flexible, but you become very āonlineā and I miss working directly with people in a team (sometimes).
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You know this sounds like work and a lot of people have jobs where they are paid a salary to do exactly that.
Iām not sure what you mean.
To me, the cycle is the cycle.
I have a better chance to get a good return on crypto in the five or six months after a US election than the five or six moths before it. Thatās been the case with the last three cycles. It doesnāt matter what regulations are occurring, what ETFs are happening, who wins the election, etc. It affects the return in percentages, but thatās hard to measure because interest in crypto changes across a cycle and from cycle to cycle.
Itās unlikely that regulations and other approvals are achieved in time quick enough to end a cycle, hold it up or allow it to continue. For instance, a BTC ETF was āannounced to be submittedā towards the peak of 2021. It didnāt hold up the cycle and didnāt get approved until 2 and a half years later. And when it was approved, the price had already recovered from the previous cycle and it actually dropped shortly after New Year (twice) during January.
Weāll wait and see, but Iād be surprised if the price of 90% of crypto will be more in November 2026, than it is in November 2025. Coins have rarely acted that way. A handful might (LUNA did last cycle) but the majority will flounder. What goes up must allows come down and correct. One way or another. Whether they reverse or recover is anyoneās guess.
The only black swan event I can think of was covid. Even that allowed a quick correction then a slow build out of it. Without it, it probably would have done what bitcoin has done since March this year. Choppy downward trading until it broke out around the US election.
All Iām saying is as far as I can tell thereās three things which give crypto its value.
-
Itās secure - I buy one and if I hold onto my private key no one else can steal it.
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Itās scarce - I buy it knowing exactly how much of its available.
3 its tradeable - I can sell it again with no issues(and of course counter to that enough people can and will buy it). Based mainly on the first two criteria.
If you apply those three tests then it wonāt ever go down to value to 0.
It can decrease and increase in value in monetary terms depending on the money chasing it.
Doesnt help when deciding if one bitcoin for example is worth 100k USD.
Some guy paid 7 million dollars for a banana on a wall I read.(ironically a crypto guy).
Makes you wonder crypto it distorts the true value of a dollar.
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Point 3 is the sticking point.
Thereās no guarantee of that, as has been shown in every bubble so far.
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Thatās through spot market trading. You donāt need to even buy the coin outright though.
You can buy it on a perpetual contract. You donāt own the coin, but the price travels at a similar rate (with associated fees of course). You have flexibility in how to trade it (long or short) and can flip it at any time through a cycle.
You still need someone to buy and sell the contract, but youāre not holding the coin. And you canāt stick it on a cold storage wallet outside of the exchange.
Thereās also ETF purchase of bitcoins. Not sure how thatās done and whether the ETF āowns the coinā or not.
Food for thought when youāre thinking of supply and demand.
Bitcoin shouldnāt go down to the value of 0. Fark, Iād be ā ā ā ā scared if it lost 90% of its value down to $10k. But bitcoin aside, some coins can pretty much funnel all their way down to a minimiscule price from its top. And trying to find a buyer if youāre looking to sell the bottom can be tough because of the demand.
APE is a good example. $27.60 in April 2022. Has fark all use. Donāt think you can use it as a currency. October 2023 looked like a decent low (with other crypto coins) at around $1. Continued to reach a new low in August at $0.46c. Itās $1.70 at the moment.
Itās unlikely that the coin reaches the heights of $27.60. But the low can definitely go lower. As has been shown to be the case since the last cycle. Certain parts of the cycle, it performs well, others it doesnāt. Just like a high majority of crypto coins.