How To Understand and Survive Crypto Cycles

SETTLING:

In the short term, we will always find many bullish/bearish catalysts that will undoubtedly influence the market. However, in the long term, have a strong conviction that we are going to witness a great growth of the sector in general, determined by:

1 – The rate of institutional adoption.

2 – A macro regulatory environment.

3 ‘- Decentralized technologies being developed, which will be one of the key infrastructures of the next century.

First of all let me put a mirror in front of you, I need you to look at it in detail and then tell yourself how you feel.

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Win or lose never stop learning, laziness is not an accepted ingredient in this environment, the fast pace at which technology is changing will make you strive every day not to be left behind. Embrace the discomfort and feel it as a part of you, that along with changing your mindset is basically what will keep you alert and engaged. Think in a time frame of 5 to 10 years about big platforms like ETH, SOL, AVAX, DOT and even the recently fallen LUNA versus 20 or 50 for Facebook, Samsung, Apple, etc., as they need that space of time to work on making their vision and project the dominant one in the future, otherwise they will tend to inexorably disappear, as another better technology will come along and displace them to oblivion.

PATHOLOGY:

If you are panicking, you have probably been caught by the crypto-winter over-invested, if you are frustrated because the market won’t stop rising and you are not in, the bulls passed you by and you didn’t get in on time. This is the beginning and end of cycles, you will most likely find out about cryptocurrencies because of these 2 factors. Let me give you some humble advice: increase or decrease your exposure to the market, not based on how the market is behaving, but by the ability you are having to manage your emotions. Don’t let euphoria make you greedy and panic paralyze you, if you are able to detect these feelings, you will be able to manage your portfolio well.

The market cycles left us 3 dates marked with fire in the crypto calendar, 2011, 2013 and 2017. Will 2022 be the next crypto winter? Whether it is or not, the past cycles left us marks and knowledge that is difficult to forget, therefore, we must be prepared to make the most of the post cycle, since historically after a sharp fall we have seen strong recoveries with greater capital inflows in each new cycle.

Prices, speculation and lambos aside, this technology is going to alter the system we know and will transform the world, “we are heading towards the denationalization of money and a radically greater democratization of opportunities”, consequently this cannot happen in a single five-year period, nor can we think that nothing can go wrong, nor that we will not suffer any setbacks. Cryptocurrencies are increasingly present in our lives and are having more weight in all areas. All these facts generate volatility and volatility creates great opportunities, which only those who stand firm will take advantage of.

Be clear that the crypto ecosystem has come out of each cycle stronger than it went in, but not only and exclusively in terms of money inflow or headlines, it also became stronger in activity, users, developers, researchers, training, infrastructure and less technological friction to enter/stay/exit. Therefore, knowing that I may be wrong, the cycles are generated by the adoption curve itself, which happens to be getting bigger and steadier. 

Natural selection to determine who should stay and who should go acts like gravity, except that this gravity is generated by the market itself when it is pushed to its limits. That gravity causes the weakest, the sick, the elderly and those who are just around to be, to fall. Those who did not learn from the first cycle, failed again in the second and most likely failed in the third cycle, so it is important to prepare, but not to run a sprint but for the biggest marathon you have ever run. This marathon that you are going to start has the challenge of running through the Serengeti, therefore, let’s go to each cycle with clear ideas and take control at all times. Do not get burned by the sun of the Serengeti or get into the waters of the Mara River.

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BOTTOM LINE:

I know it costs to stop eating a dish when we are liking it a lot to order dessert, I know it costs to make sensible and logical decisions to close ranks when everything flows, but let me tell you that the crypto graveyard is full of remains of brave investors, greedy people, little or nothing formed, and especially in the gutters lie opportunistically piled up against each other. I ask you to please stick to your plan, your methodology and the strategy you have designed according to your objectives and risk profile, otherwise you will visit the crypto graveyard in 3 or 4 years, do not doubt it.

Cycles are neither good nor bad, they are natural and they are necessary. Need to make the roadmap clear which is the purpose of this article: 

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END OF CYCLE: “When things go right, they are never as good as they seem” the market keeps going up and everyone wins, whether deserving the award or not, sell and grab some popcorn, the job is done.

START OF CYCLE: “When things go wrong, they are never as bad as they seem”, at that moment the market will be whispering to your ear over and over again the opposite, but it is not true. In the deepest of soils is where a good investor, where the smart money starts to work and build what later will be your wealth and profitability.

The future, the prize and the success are there for everyone, but it will not be for everyone, only those with a DNA full of resilience will reach it.

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