Cryptos: time to get the hell out?

Hi guys,

(Social) Media seems to be trying to convince us that this time is different, crypto now has a lot of utilities, smart contracts, NFTs, corporate holders, blablabla, but the fact is that once someone fires the shot, I think everyone will run to the door, because, like me, probs 99% of the people buying are only looking for a quick profit and not really benefiting from the value the coin/token might provide.

Do you think this bubble will burst just like in late 2017, or that we will keep having a consolidation?

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I experienced the burst of the bubble in 2018 (end of 2017 was the peak) myself. A lot of the things happening at the moment are reminding me of those days. I also read whitepapers back then, invested some play money in different ICOs, did day-trading etc. Overall, I would have been better if I just held on to BTC / ETH / XRP.

It’s hard to give an outlook, and I guess nobody of us is really having a crystal ball. I think what we see is an asset inflation, people working from home, some people getting money from the government and trying to get rich quick.

As you rightfully said: 99% of the people are in to look for a quick profit. And if influential people like Elon Musk are twittering some sh*t, it has a huge effect on the prices of BTC and other cryptocurrencies.

BTC might(big might!!!) have a value as an asset in the future, but that’s not given. The only thing here is the scarcity. But if scarcity alone would guarantee anything, nobody would ever sell a BTC.
From a technical point of view, most of the cryptocurrencies are flawed. Also blockchain technology itself is not the cure for everything: it’s used as a system where party A does not trust party B and still wants to trade with him/her.

I expect another bigger downturn like in 2018, and then maybe one/two/three years of staying at a low level. Let’s be honest: who of all the “crypto experts” in this forum / YouTube actually bought cryptos back in 2019 or March 2020.

If we see a downturn in the stock market, crypto market will most probably also go down. Forget about the technological side of decentral exchange, being better than FIAT money etc. People still pay in USD, CHF or EUR. So you still need to exchange your cryptos into “normal” money. Unless that changes (and I don’t see that coming soon - if so, governments would forbid independent cryptos) the technical features are just nice to have.

Just my 2 cents

PS: I still hold cryptos, but I bought it back in 2017/2018 and a little bit in 2019 (unfortunately not enough)

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Of course this will happen as this is a normal market cycle. Question is more how much grow potential to you see the crypto market in general (compare to e.g. Gold). With BTC currently we are before the last parabolic leg up, or already in a correction down.

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That’s easy to check on Glassnode, short-term holders are selling, long-term holders are stacking more bitcoins. Total supply held by long-term holders keep increasing.

If you sell now, strong hands will happily dispose you from your coins.

Edit with the graph:

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Every time is different.
(Not just in “crypto”)

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There will be many excellent answers from the many smart and knowledgeable people in this forum on whether a crash is around the corner and if and where there is a bubble.

What I can say is just this: If your investment strategy entails precipitously doing things “the h*ll”, then it’s maybe not the right one? Maybe you have allocated too much money to equity?

The market will always feel insecure. Has there ever been a time when everybody was in agreement that “now is a good time to invest”? And if so, have they been right? There will always be good reasons to buy or to sell. There will always be pessimists like James Rickards who say that the world is about to implode. Maybe they are right, maybe they are wrong. The art lies in choosing an asset allocation that works for you in good and in bad times. On this topic, I can recommend Morgan Housel’s book “The psychology of money”.

Or let us look at it the other way around: You exit the market, run for cash or gold, and then—nothing happens, the markets keep rising. A crash will come, sometime, of course, that’s part of how markets work. Will you then re-enter the market? Will the market feel secure enough? Will you be able to make up for the missed market gains? Or maybe you’re right: You exit the market, a huge crash hits, and you were able to dodge the blow. But will you be able to do it again? Will you be able to spot and avoid the next crash, too? Are you confident that this constant worrying and exiting/entering of the market is good for your overall longterm yield? Or for your nerves?

Manage your money in a way that helps you sleep at night.

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I was writing an answer but I realise that it will not add anything more than what our colleagues stated above. :sweat_smile:

I would just suggest some cleaning in your “following list” on Twitter if overly-enthusiastic tweets is all you can see in your feed. Yes, the story won’t be exactly the same as last time but it will surely rhyme.

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This time it’s different, there’s now even tv ad for crypto investment in mainstream channel (was RTS 1 I think).

Exactly. Since the beginning of this rally in 2020, the share of long-term holders is declining, if anything.

And a rise in short-term holding, such an in late 2017 (which looks somewhat similar to now) seem to to signal an impending sharp decline in price.

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But do you see it since 2012? My point is that 99% of the people are not here for a quick trade.

Since 2015 long term holders have scooped roughly 1m btc (to simplify), that’s $45b in value at today’s price. Not too bad.

Also to stay on topic, my advice is always to hold for a full cycle if you can, so to wait until early 2024 in this case and for bitcoin. Other coins might be different.

Since 2015, about 4 million Bitcoin have been mined and entered circulation.

So long-term holders have merely mitigated the dilution (due to mining) of their holdings.

I see 2012 as well, but I’m still not sure what you are trying to tell me. I’m not trying to troll you, I just want to understand your position.

Let’s take the peak of long-term holders in mid of 2020: that’s a little bit above 12M, let’s say it’s 12.5M BTC. Back then, short-term holders held roughly 3.2M (or 3.3M, 3.4M, doesn’t really matter). That’s a total of 15.7M BTC, where 20% is held by short-term holders and 80% held by long-term holders.
So can we agree first that it’s not 99% of the people in for the long-term?

2nd: my 99% were over-exaggerated, but I was referring to the recent spike in crypto currency prices from mid of 2020. And I still think that a lot of people joining the bandwagon now are in for the quick cash.

3rd: if the Winkelvoss twins are buying more BTC and just keep it - how does this affect the long-term theory? Yes, the majority of BTC is held by long-term holders, but if we don’t know the number held by crypto whales you can’t really say that the majority of people is in for the long-term.
Just imagine we have some other Winkelvoss twins in China, Singapore, Mexico, wherever. Then yes, the majority of BTC is held by long-term holders, but the number of holders is small.

Interesting, did not know this. Yes, for sure someone needs to be buying, if not there is no market.
The graph suggests exactly a burst as in 2017 (low on long term hodlers matching the highest level in price. The long term hodlers will increase again as the price drops). That is how it bursts, there are a lot of bids at lower prices than current price and when a lot of people sell at market price, it just goes on picking the next bid.

absolutely!

Crypto is no equity (stocks can be volatile, even so much less, and there are assets and value generating companies behind).
Full disclosure:I did close all my positions with a very good upside, as the crypto % in my portfolio jumped from like 1% to 8%. I could have left the 1%, but I don’t think it was worth on risk-benefit potential… Might reevaluate next year, let the dust settle.
The correction since Feb on growth stock made me feel a bit more cautions this time and cash in some benefits TBH :sweat_smile:

Just wanted to discuss and share. I might be wrong, and there might be another stretch upwards before it comes down. And when it does, I don’t expect it to go under 10K, but no one knows the future.

I am not anti-crypto, it has utility for sure but it will not make all of us millionaires.

Thanks for the feedback

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I just noticed that the post is in the cryptocurrency section of the forum. :smiley: :see_no_evil:

Either way, I think what I’ve said holds true.

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Presumably you meant “now”.

I saw this at the airport on Sunday.

Personally, I became uncomfortable with my crypto holdings when too many shitcoins like SafeMoon pumped and got out at 58k$/BTC prior to the 64k$ ATH some weeks back.

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(thanks, edited post)

I sometimes think about buying Crypto but I find it very difficult to pick a clear winner between all these various potential winners.

I now hesitate between two alternatives:

  1. Being the shovels seller during the crypto rush: Buying shares of an established crypto trading platform and thus benefiting indirectly from the crypto rush: For example Coinbase (COIN)

  2. Buying a “Blockchain” ETF and thus investing in the related ecosystem of Crypto. For example: Siren Nasdaq NexGen Economy (BLCN) ETF or the Amplify Transformational Data Sharing (BLOK) ETF

My preferred option would actually be investing in an ETF which includes the whole crypto market cap. It would be a crypto VT :wink: Do you actually know if something alike exists?

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I heard (in the background) the compound guys in one of their last YouTube videos complaining that people can buy 3x leveraged SP500 ETFs but not crypto ETFs for some (missing) regulation

You could check these ones:

However, you can’t trade it with IB… I had a few weeks ago this one: ABBA | 21Shares Bitcoin Suisse Index ETP, but I sold it just before the recent “crash” (lucky me).

IB allows you to trade only UK based ETP on cryptocurrencies and US one, maybe ETP from Canada too ? Unfortunately, I don’t know if there is other providers who don’t just have an ETP which only track one cryptocurrency like CoinShares | Digital Asset Investment Strategies for Professionals :rocket:.

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Also check the Blockchain ETF:

https://etf.invesco.com/ch/institutional/de/product/invesco-elwood-global-blockchain-ucits-etf-acc/trading-information

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