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Archive for the ‘Bitcoin Cash’ Category

Time to Sell?

Posted on: February 5th, 2018 by jms No Comments

 

I did it… I pulled the trigger and sold my entire position in Bitcoin, Bitcoin Cash, and Ethereum.

 

I was holding off for a while as I watched the price of cryptocurrencies fluctuate a few hundred every day. But I just couldn’t ignore the steady decline over time, so I decided to gamble on the fact that ongoing government regulations and consistent shorting on futures funds is prompting a big sell-off.

 

What’s even worse, the days of using credit as leverage to buy into cryptocurrencies are dying, resulting in a smaller pool of buyers, which can drive prices down even further.

 


 

There is a lot of news circulating that has a lot of bias, and it’s bias on both sides of the spectrum. What I’ve always tried to do when writing my own personal opinions on this topic is to offer a more balanced view. Granted, I am very bias towards favoring Bitcoin and other cryptocurrencies, but I do make a concerned effort to put my personal bias aside for a more balanced look at things. This will not only benefit anyone who reads this, but myself as well, since it forces me to ignore the noise and formulate my own opinions that will ultimately dictate my own actions. And my own opinions say it’s time to sell, especially if you got in early and saw a significant gain over time.

 

I thought about selling when the price was making a push towards $20,000, but I let my cognitive bias get the best of me then. I decided to not let that happen again, since the idea of losing more would border on stupidity in my opinion. If I can walk away with a decent profit, why not? I may have missed an opportunity to sell higher, but I can still sell high, and that’s a good thing.

 

There are many forms of cognitive bias, but the one at play with Bitcoin I think is the idea that we tend to seek out or favor the information that supports what we want to believe, or confirmation bias. In this case I want to believe that the price of Bitcoin will keep going up even as it’s falling, so I’ll trick myself into believing that this is actually the case.

 

I’ll convince myself that tweets from “experts” on the topic telling me to “hodl” (hold) is the right thing to do, even though other experts, like Warren Buffet and Ray Dalio, who I should probably trust more, say that Bitcoin is in a big bubble.

 

I’ll convince myself that news I read from sources like bitcoin.com, or other popular crypto-news sites, have a valid point and aren’t just putting a creative spin on the negative news from other sources.

 

I’ll convince myself that governments starting to crack down on cryptocurrencies won’t really have a significant impact because of a funny meme I saw online like this one…

 

 

(It turns out that some countries can make a significant impact)

 

 

It’s time to get real. Bitcoin is dropping fast and for a number of reasons. All the wishing and positive spins in the world won’t change what’s actually happening. Don’t get me wrong. I’m still a big believer in the technology and ideology, and I’m still long on Bitcoin. But while it’s dropping I’ll take a profit while I can. I’m sure I’ll buy again when prices bottom out, but for now I’ll cash out and cover my gains.

 

My advise to anyone who can sell at a gain is to sell now. Unfortunately, this isn’t the case for everyone. For anyone who can’t sell at a gain I only see 2 options.

 

1) Hold if you can afford to and hope for the best. I do think there will always be value tied to Bitcoin in some way, even if it never climbs back to where it was. Remember that Bitcoin and blockchain technology is still relatively new and evolving, and so it still has a lot of potential. Holding if can afford to is probably not a terrible strategy.

 

2) Cash out and accept your loses. Despite what we may read, cryptocurrencies are a gamble right now. When we place bets we have to be willing to lose sometimes, otherwise we shouldn’t be placing bets. The good news is that most people (governments included) agree that blockchain technology is here to stay and cryptocurrencies, in one way or another, are likely to have a place in the future of trade. So even if you decide to sell at a loss now, there is a good chance you can buy back in later when things level off, and hopefully make a profit then.

 

 

Is Bitcoin Too Expensive?

Posted on: January 16th, 2018 by jms No Comments

I was recently talking with a friend of mine and the topic of Bitcoin came up. I asked him if he’d buy any right now and he said no, it’s priced too high and I can’t afford it, to which I replied, well you can always buy fractions of a Bitcoin. Then I went on to say that I believe Bitcoin is still the best crypto currency to own right now. We are seeing massive volatility lately, but I think that should be expected for a new type of technology based asset class that promises to reshape the future of payment systems as we know it. We’ve seen crazier swings in the past, but Bitcoin, for one reason or another, has always bounced back with a vengeance. So is Bitcoin too expensive?

 

Based on recent news regarding China and South Korea considering a ban on crypto currency exchanges, we’ve started to see another downward price swing for Bitcoin and other crypto currencies. But what’s interesting is that, as of this writing, Bitcoin is still selling above market averages on South Korea’s largest exchange, Korbit. At the time of this writing, Korbit has Bitcoin listed for 14,748,000 Won, or $13,863.12 USD, far above the average of $11,678.61 USD from other top exchanges. And in other news, it seems Japan’s largest bank has plans to start it’s own crypto currency exchange this year. See https://news.bitcoin.com/japans-largest-bank-to-launch-cryptocurrency-exchange/.

 

Despite mainstream news, it seems Asia is not giving up on Bitcoin, not by a long shot. What I like about mainstream media is how it keeps creating buying opportunities for Bitcoin whenever we read about signs of crypto-armageddon. With the high price of Bitcoin reaching near $20,000 USD right around this time last month, and now reaching it’s lowest point since, I see a perfect buying opportunity, especially with some major financial institutions like Mitsubishi UFJ Financial Group, Inc and NASDAQ starting to get involved. Bubble or not, I think we’re only starting to see the beginning stages of growth for Bitcoin and other popular crypto currencies.

 

So again, is Bitcoin too expensive? I think the answer is… not even close! When my friend told me he wouldn’t buy an asset that trades at such a premium I asked him if he would have wanted to own a share of Berkshire Hathaway Inc. when it was trading around the same price in 1993 as Bitcoin is today, or if he would have bought into Amazon.com when it was trading at a premium of just over $800.00 this time last year. Berkshire Hathaway Inc.’s class A stock (BRK.A) currently trades at over $315,000.00 a share, and Amazon.com (AMZN) is currently at over $1,300.00 a share.  He had no good answer other than, Bitcoin is just too speculative. While I do agree with that, I also think the speculation is, in many ways, overhyped by mainstream media. I laugh when I hear Bitcoin (a transformative technology with a set limit that has the potential to redefine how we buy and sell) being compared to a flower like tulips.

 

We may be in a bubble, but we were also in a bubble when the Internet first hit the scene, and when housing prices went through the roof. Since then, housing prices have rebounded, and those early surviving tech stocks that actually offered promise are ones I wish I had owned at the time of the .com bubble. So for me, it’s not so much a question of price as much as figuring out which crypto currencies will survive the mayhem. So far, Bitcoin remains at the top, and as long as I keep hearing most people only mention Bitcoin when the topic of crypto currencies comes up, I know it’s still far off from being a losing bet.