There is everything on the Internet. But not everything is reliable. In other words, the information is not always objective. Because the vast majority of content creators use the networks to propagate their biases and promote their agenda.
What is the agenda of a cryptocurrency exchange? Make money. And to achieve this you must increase the number of users. We must remember that an exchange is a company with shareholders, managers and employees. The profitability of the company depends on its sales. I am referring, of course, to income. So, they go to social media with a narrative. But it cannot be an objective narrative. It must be a narrative that promotes the interests of the company.
Suppose we go to the barbershop and ask the barber: Do I need a haircut? Suppose we go to the bakery and ask the baker: Is the bread good for dinner? Now suppose we go to the Twitter account of the CEO of a cryptocurrency exchange and ask the subject: Should I buy Bitcoin?
This is an industry where people buy products and services whose excellence is advertised by those who sell them. The Cointelegraph Top 100 is a list of the most important “influencers” in the crypto and blockchain industry. Who are they? Well, almost all of them are bakers selling their bread.
In today’s fragmented world, each digital tribe creates its own reality. The bakers in this industry know very well that to make money you have to create a “community”. And, in the case of the crypto community, converts have typically come from sectors such as libertarian, anarcho-capitalist, conservative, tech, and venture capitalism. Then, tweeters, youtubers, entrepreneurs, freelancers and others create specially targeted content to attract these groups in the same way that any company uses its accounts on social networks to attract customers.
It is not uncommon, then, for a person to turn to the networks in search of information about Bitcoin and other cryptocurrencies. After watching various documentaries on Youtube, following various crypto tweeters and reading industry media, the person ends up becoming a libertarian militant. Usually, the initial curiosity begins with a financial interest. In other words, people think that with Bitcoin you can make money. However, after living with the community for a while, the tricks start to stick. And Bitcoin stops being just an investment opportunity to become a matter of identity. Suddenly, the person changes her profile to put lights in her eyes. And he becomes a hero of the libertarian utopia and a deadly enemy of private banks, central banks, fiat money and the dollar.
Now, is it possible to talk about Bitcoin without so much right-wing politics? It’s possible. Let’s make the effort. I remind you that you are reading an opinion article. It is not necessary to accept what was said. It is not necessary to reject what has been said. But it would be useful to reflect on what has been said.
What is Bitcoin? Well, Bitcoin is code on a decentralized network of computers. That is, it is a series of numbers and letters from a database. Obviously, like languages, code has no intrinsic value. You don’t eat, for example. In other words, not much is done with it in a concrete sense, because a code is an abstraction. It is not an apple, a rock or a liquid. It is a symbol that presents an exchange rate. In other words, it has no intrinsic value. What it does have is monetary value. Which means that the value of Bitcoin can be represented numerically in other currencies. Let’s say it’s a coupon that can be redeemed for other forms of money.
What is a rate? Let’s use the BTC/USD pair. Here we have two quantifiable elements. The exact exchange number is defined by supply and demand. In other words, the rate is variable. This rate fluctuation over time is what makes Bitcoin a speculative digital asset. This volatility implies a risk (of losing) and an opportunity (of winning).
People buy Bitcoin for various reasons.. We have the ideological buyer. In this case, Bitcoin works as a citizen currency in a kind of monetary emancipation. Of course, we also have convenience shoppers who use technology as an alternative payment method for privacy, strategy, or necessity.
And we have, of course, the investor. Here the goal is financial. Bitcoin is bought how to buy a collectible. It is bought, accumulated and kept waiting for a price increase in the future. The investor normally buys with an expectation. And sell with an expectation. If the investor is optimistic about future demand, he buys. And if the investor is pessimistic about future demand, he sells. Then, the investor has no choice but to make a forecast. In this business, money is made by buying low and selling high. However, today’s “expensive” and “cheap” is defined by tomorrow’s price.
How do we know “tomorrow’s price”? We do not know. In fact, nobody knows. But we are obliged to make an estimate. How do we orient ourselves? We can rely on demographics, macroeconomics and sentiment. Bitcoin is essentially a phenomenon “millennials”. So, a good starting point is to analyze the age, behavior and economic position of this generation to make projections. On the other hand, Bitcoin benefits a lot from loose monetary policy. That is, Bitcoin needs liquidity (in the macroeconomic sense) to grow. Also, Bitcoin thrives quite a bit in periods with high risk tolerance. Optimism and greed is the gasoline of Bitcoin. Fear and conservatism are your enemies. Morning? Better or worse? What is the expectation?
Bitcoin for newbies. Watch your pocket. Put the financial as your priority. Focus on growing financially. And don’t waste time in idiosyncratic fights with others on Twitter. Important Topics: Portfolio theory (diversification and balancing), risk management, and strategy dollar cost averaging. To study!
last thought: Unrealized losses are also losses. On the one hand, they remind us that we buy expensive. On the other hand, during the same period, surely, there are assets that are not falling in price. So by waiting for recovery, you are actually wasting your time. Basic Principle: Profits are lengthened and losses are cut. Profits are taken at the top, and the bottom is bought.
Bakers in this industry dismiss unrealized losses as trivial. “I am a long-term investor.” But, when they recommended to buy Bitcoin at $67K, the short-term forecast was $100K. The price fell. And many people are losing money. What can they say now? Well, they take out the “long-term investor” wild card to calm people down and not lose customers. This is a space full of sharks. Let’s not be naive. Don’t lose money by listening to tall tales. Uses stop loss. Manage your risk.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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