Great Analysis of Bitcoin Price Crash

There’s no shortage of bloggers’ opinions on trends in Bitcoin (or any crypto) prices. I am a fan of Mark E Jeftovic’s Guerrilla Capitalism  blog. His post from Feb 7, 2018 about Bitcoin’s “Trough of Disillusionment” I found well researched, comprehensible, and highly enlightening.

It discusses the pattern of Bitcoin’s seemingly wild and allegedly “unpredictable” price fluctuations. The author’s thesis is that these fluctuations are not “unpredictable” at all, and in fact follow a fairly established pattern known as the “Hype Cycle” which can be depicted as:

This analysis helps clarify the price movements and (I think) provides comfort that things are not spinning out of control, they are just following a natural course of behavior. And to continue to hold on for the Slope of Enlightenment to reach the desired destination: Plateau of Productivity.

A Bitter Story About A Quarter Bitcoin

I’m embarrassed to admit how much my fractured Bitcoin impacted my psyche – especially as Bitcoin approached $20,000 in early December. When my Bitcoin was whole, I knew how much I had: whatever its valuation was, that’s what I was holding. Now I had to calculate the current price by 0.995 and it disturbed me beyond reason. A well-adjusted person would just round-up and live their life. I’m just not calibrated like that.

As soon as I received a Christmas bonus, I wired it to my Kraken account. At almost $20K, I couldn’t buy a whole Bitcoin, but I could buy a fraction to make it whole once more.

The rational part of my brain said “Use this $5K to buy Ripple – it’s almost a dollar and seems to be increasing a dime a day”. Another part of my brain said “Didn’t you read Ethereum is under-valued? It’s still around $500 – you could buy 10 of them! And if it does go up, you’ll enjoy 10X the profits”.

But the lizard part of my brain said “MAKE MY BITCOIN WHOLE AGAIN”. So I spent $ $4,688.40 USD on 0.25 BTC, which I figured should be enough to preserve its wholeness even if I transfer it a few more times.

Then I felt guilty and used the remaining $298.60 to buy 391 Ripple for $0.76 each.

Not 2 weeks later, Bitcoin fell to $14K, and Ripple doubled to $1.25.

Why oh why will I never learn. It was that same voice that insisted I buy Bitcoin in December 2016 when it was $700 (which I regrettably ignored) that said to buy Ripple instead of Bitcoin with my Christmas bonus. If I listened the first time, that $700 would have grown 20X IN ONE YEAR. And if I listened to that voice regarding my Christmas bonus, and invested the $5K in Ripple, it would have doubled WITHIN A FORTNIGHT. But I followed my emotions and ignored my senses.

When Ripple reached $3, it was small comfort knowing my $298 was now worth almost $1,000, because the masochist in me also calculated the $5,000 I didn’t invest in Ripple could have bought me another whole Bitcoin. Did I mention Ethereum ended up doubling in value too? So that $5000 could have been $10,000 by now.

I need to teach that sensible voice in my head to punch me when I ignore it.

Does anyone else have a bitter Bitcoin story they’d like to share?

I’m So High

Three weeks ago I lamented the poor performance of my Monero, Dash, Ethereum, and Bitcoin Cash holdings.  You can read my pity party here. Currently, all of my alt coins – and especially the 4 that I was bellyaching about – are above my purchase price. WAY above.

  • Ethereum: Appreciated 75%
  • Litecoin: Appreciated 75%
  • DASH: Appreciated 90%
  • Monero: Appreciated 95%
  • ZCash: Appreciated 85%
  • Ripple: Appreciated 60%
  • Bitcoin: Appreciated 230%
  • Bitcoin Cash: Appreciated 300%

Obviously I no longer regret buying when I did (but kick myself for buying only 1), and am grateful that I got in before this recent surge while I could still afford it. I never expected prices to get so high so quickly. I’ve followed some crypto analysts over the last few years and their predictions have either been exactly right or pretty close. In fact, this spring Cointelegraph.com reported Bitcoin reaching $10K by the end of this year and that prediction looks like it will become true in the next 24 hours.  The new forecast is Bitcoin reaching $40K by the end of 2018.

If you’re getting priced out of Bitcoin, consider buying into the alt coins. Their prices are still under $1000 and you can see they are appreciating aggressively. Keep in mind: Bitcoin may have been the first, but it may not be the long term winner.  Do you wish you invested in Facebook? Its IPO was priced around $32 and today it’s $180. You could have quintupled your money. But before Facebook was MySpace. And before MySpace was Friendster. Friendster was first – do you remember Friendster? Exactly. If you put your money on Friendster, you would have lost. Maybe Bitcoin is Friendster or MySpace. Maybe an alt coin will be the next gold standard and Bitcoin will be the next generation’s punchline.

You may want to buy into cryptocurrencies now before prices soar higher. You may anticipate a market “correction” and wait to buy when prices drop. The moral of this story is to get in when you can, and hold on with the belief that the value will increase.