Climbing Everest by inches: what the “F” is going on with Crypto?
2019 has been “ruff” for BostonCoin and other cryptocurrencies.
Early crypto investors have seen their portfolios hammered by cruel and fickle markets. Far from the halcyon days of 2017/2018, $20 000 bitcoins, where every Uber driver thought they were going to buy a #Lambo, the markets have not been kind of late.
Just remember that early-stage investing is a marathon, not a sprint, and keep your eyes on the end goal.
If you are an investor, as opposed to a trader, then you will not be watching the crypto markets on an hourly or daily basis. Fluctuations that may seem major now will all seem minor with the benefit of hindsight.
Every ambitious armchair investor loves to tell you “if you invested $1000 into Amazon/ Apple/ Microsoft/ XYZ/ ABC 'back in the day' then you'd be a millionaire now...” and that's all well-meaning advice. The only problems are a) you cannot act on this advice (pending the invention of time travel), b) the person telling you this has generally not acted on any investment and is talking through their hat, and c) they always overlook the fluctuations and false starts.
What your friends won't tell you (because they don't know)
Fluctuations happen. Before Microsoft became a household name, it was a tennis ball tossed on the waves of the ocean. With the benefit of hindsight, nowadays we can see that Microsoft was a good investment. But you had not heard of it thirty years ago, so how would you have even known to invest?
In April 1986, you could have picked up MS stock for ten cents. Try to buy one in December 1999, and you would need $58. That's a massive gain for anyone who did get in for $0.10; but few did. For those who bought at $58, recognizing a rising company, you would have watched your investment drop by over 60% within the next 12 months.
Welcome to the land of “what the F?”
Fickleness and Fluctuations can affect even the wisest investors. Microsoft dropped from $58 to $21 in a year. Many investors would have lost faith and sold out, crystallizing a 64% loss. The hardy investors held on.
It took seven long years, but gradually, the MS stock went from $21 slowly back up to $33. If you had bought the dip, you had made around 50% over seven years. If you were still holding on from 1999, you would still be sitting on a loss of almost 50%
Do you stay or play?
Again, with the benefit of hindsight (and a quick glance at Google), you would choose to stay, as MS stock eventually recovered to be worth over $120... but not before dropping down to $16.
As a long-term technology investor, you will need two things (at least until we invent time travel): you will need to have nerves of steel, or a total willingness to disregard all news updates.
It took sixteen years for Microsoft stock to beat the previous $58 peak. The whole time from 1999 to mid-2016 was a slump. It has only been the last four years where the investment has multiplied in value by triple digits. Prior to that, we saw almost two decades of flat or negative growth.
If you had put your kid's college fund into Microsoft stock when they were born in 1999, by the time they were 17, you would have been better off putting your money in a bucket in the backyard. But if you had held on until after college, you would finally win.
It can be difficult to avoid the stock market news. They often put it in the last 30 seconds of the TV news, and the traditional press loves to scream loud headlines when markets take a dive. Understand two things: 1) it is all an illusion, and 2) good news does not sell.
When stock markets or property markets drop, the news editors love to say things like “$100 Billion wiped out”... but it's just froth and hot air. If property prices in one major capital city all went down by $20 000 per house, yes, it could represent a combined market retraction of $100 Billion; except, it doesn't. You don't lose a penny unless you sell. And if you've been in the market for a few years, you've probably done OK.
What have markets done for me lately?
We are watching markets closely for any opportunities, and have recently purchased some more Ethereum (ETH) when it went “on-sale”. This little dark horse was priced around $1000 last year, and more recently has been $200-300, which we think is reasonably good value for now, and only a fraction of what we anticipate it could be worth in future decades.
Are there any winners?
Despite the fluctuations, fickleness, and tomfoolery of the broader cryptocurrency markets, we have managed to have a few wins.
Binance coin 143%
Basic Attention Token 138%
As of 29 March 2019 BOS price 28.6473037 NAV 26.0430034
As you can see by the chart, crypto markets were hit hard in October, November, and December last year, and are just starting to climb back out from the pit in 2019. We continue to watch out for opportunities, and we continue to hold fast to the good investments in exciting technology projects.
This 'puppy pack' will mostly “sit” and “stay” for now (unless something monumental occurs). Stay strong, ignore the static in the news, and hold tight (#HODL) through fluctuating markets, and be prepared to buy in the dips if you can. Thanks for your continued #suppawt. JB