Crypto - the short-term market contradiction

It has been one of the very few calendar quarter in recent years to result in a crypto global market cap drop. Simple yet important acknowledgment. Q4 2016 was the last one before, in a less dramatic measure (Note that we also have seen similar or worse quarters in the early years of Bitcoin).

While no one can explain for sure the details of how and why we can at least provide a few facts that are making the statement above less of a surprise.

First, the quarter right before, Q4 2017, was a major blow out in the investment world. You can probably see all kind of insane performances during that time frame. A lasting consolidation period afterward is almost common sense. In addition, the public recognition of the crypto space in Q4 logically lead to a global wake-up time: governments and regulators getting out of their way to catch up with the space, unintentionally bringing fears and uncertainty for many*.

Second, those *many are mostly people who invested in crypto sometime in 2017, or most of the times, in the second half of 2017. Unfortunately, “gambled” is the better word for it, as they threw money in without knowing the idea/high-level concepts behind their particular investment. Thinking they could become rich quickly, they also lost it big quickly - yes, they are the same ones who sold recently for the most part.

We always say the key is to invest only money you can afford to lose. While it remains true, the more important success key, in my opinion, is to invest in a project you really believe in. The belief is the only thing that will let you patiently wait during tough periods like Q1 2018. Long-term strategy is the biggest winner, and for long-term to be realistically enabled, you need the belief, period. That’s also the beauty: big winners deserve it, in the end. As it was never a gamble, it always was… a vision, and still is. That’s as good of a skill than any other obvious one.

Finally, keep in mind, we have seen periods of time when prices increased significantly with no real progress to back it up. The same way today, I’d say we are seeing prices go down significantly with actual progress to contradict it. This is the market contradiction, and something to always remember: the crypto market, for now, is irrational in the short term. It tends to be more rational in the long term. As for the question, which one comes after the other? My answer: does it really matter? If you want to think, think long term. Otherwise, go on and gamble again. Ultimately, progress will be the driving factor.