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Crypto Blog

Why should you NOT buy Bitcoin

I feel the storm, a breeze whips my face, the wrath of the community is entering this post. I am scared, I am trying to run, but the angry mob of Bitcoiners chases me, hunting me down, help me…

As many of my followers know by now, I am a Bitcoin fanatic. This post has no intention of degrading Bitcoin or any other cryptocurrencies. Because I know Bitcoin, believing that it is not for everyone is a crucial part of my understanding of it. That Bitcoin overtakes the world and will be the only monetary system that exists is utopic and is not very likely to happen. The mixture of institutionalised monetary systems and hard-to-produce currency is what our world needs in my opinion.

Many of you might be thinking “So, what is the point of the title?”, and you are right, this article is not dedicated to why Bitcoin is great.

Unsplash.com

Let us dig into some reasons why you should not buy Bitcoin.

Uneducated decisions – Inform yourself. If people do not know about Bitcoin and you decide to invest into it, you are likely to underestimate the risk it brings with it. Too often people jump onto the FOMO train thinking “ah, I know the volatility and the risk”, these are the ones that are most likely to be crying the loudest as soon as they get spit out with less money. Understanding Bitcoin means that you must educate yourself.

If you are a hater – Every Bitcoiner can agree on the fact that Bitcoin haters get punished by not investing in it. The more days go by the more silent the Bitcoin hating community grows, the higher the Bull-run goes to more people understand that being against Bitcoin might not be a good path. However, even when everyone owes Bitcoin and the world is living happily some haters would rather prefer to not have any, which is fine, more for us.

If you cannot afford it – This is an obvious one, people that do not have the money, should rather stay away from Bitcoin since it is a high-risk investment.  Bitcoiners seem to have the most problems with that since many take up mortgages or even sell houses to invest. This is not a very smart thing to do in my opinion. Losing money hurts, reduce the damage by reducing your order size.

If you have a hurry – Never ever rush into a trade. These were the worst trades I took. Always, take your time, best to have a routine on when you are investing or trading, everything else will make you regret your decisions very hard.

No time – There are two things you need to trade or invest successfully into cryptos. Money and time, both a luxury to have. If you cannot afford both, best not to stress about having cryptos too. This is just a recommendation.

Honestly, this was one of the hardest articles to write so far. I can think of a thousand reasons on why you should have Bitcoin and many of them make much sense, but my head can not think of many reasons why to not have Bitcoin. Add up if you can think of more!

Wrapping things up, I understand that some people can not have Bitcoin because of financial reasons or simply because they do not have the time or the nerves to wrap their heads around it. This is very fine for me since it is your choice to not have Bitcoin at the end of the day. I can tolerate people not willing to buy Bitcoin because out of scepticism or fear and I accept negative haters too, because they are public relations, there is no such things like negative PR. Thank you haters.

If you want to educate yourself more about cryptocurrencies and trading or investing, check out my website and my YouTube. I even have a Podcast on Spotify in which a do a daily commentary of my understanding of the markets, be sure to check it out and leave a follow.

My YouTube:
https://www.youtube.com/channel/UCuNA5jnimv3erEJ1VmUBSoQ

My Twitter:
https://twitter.com/aversionfall

My LinkedIn:
https://www.linkedin.com/in/yves-hofstetter-9752b6202/

Or support me directly on Medium:

https://yveshofstetter.medium.com/

Categories
Podcast

How to scan the market 13.01.2020

The markets are consolidating, the Alt’s and Bitcoin are not much way from setting a new higher high, maybe giving us first signs of a long trend that is still there.

Categories
Podcast

How to scan the market 09.01.2020

Bitcoin and the Alt-market is consolidating, are we going to see some new ATH soon?

Categories
Crypto Blog

How trading cryptocurrencies changed my life

Do not worry. I will not tell you how I became a millionaire by speculating or investing in the right penny-stock or shitcoin that shot me to the moon. The reality is, I am still working a 9 to 5 job, and I am a student. Trading changed my life differently. It opened doors in my mind that I have never walked through before in my life, which has left a permanent change in my state of mind.
Learning a new skill involves commitment, and it often returns more than you could have expected to get. The same was it for me with trading. So, what did trading teach me that I did not know before?

  • Risk to reward awareness – Not everything that shines must be gold. Trading taught me many things, but the most crucial thing it taught me is to be aware if something is worth my effort, time, and money, and if it is not. It gave me the confidence to sit out on things I have no expertise in. I used to be the person that tried to know everything, but trading showed me that focus is better than anything. I also used to be that guy that wanted to do everything or even buy everything. Trading taught me to do the opposite. Moreover, I used to fall for the “too good to be true” trap, but that has changed. Understanding that taking a risk is to understand probabilities made me much more aware of how to portion my resources and energy to help me stay healthy.
  • Money handling – I used to spend my money on all sorts of things that I did not need. Most of that stuff I am selling on eBay nowadays. Money is a resource; precise allocation of that resources is a tough thing to do. Trading showed me that I should never invest more than I can afford to lose. This mentality is applicable too, and helps me to stay focused and do the right thing.
  • Handling the loss of money – To spend money is easy. To make money is the hard part. Learning to deal with money means losing money. The faster you get used to the fact that you must pay for your experience, the faster you will learn how the markets work.
  • Understanding consistency – Trading successfully is a hard thing to do. The only way you reach your goal of becoming a day trader is by being consistent about your approach, and you make sure that whenever you approach the markets, you are in your zone, and you use your approach repeatedly. By replicating your approach, you become more and more successful the more often you turn up to trade.
  • Understanding business – Cryptocurrencies helped me develop various business ideas that are good and do not require much prior knowledge. However, more importantly, it showed me what works in business regards and what does not. I always thought “fake it till you make it” was an actual thing, but hard work is the essential key.
  • My fundamental understanding of how economics work or what economics should be has changed – Bitcoin and other cryptocurrencies play with the idea to exchange the conventional monetary system through a monetary system that offers deflation and increasing value. I could go on talking about that for ages. Find more arguments in my prior articles.

My 9 to 5 job does not fulfill me, and unfortunately, it does not fill my pockets either. Cryptocurrencies offer an exciting solution to actual real-life problems and cause a shift in mentality. Keep an open mind about cryptocurrencies, and be sure to learn what they are and what they do. This will help you broaden your horizon and become more aware of new potential business ideas with low competition and, practically speaking, no barriers to entry.
Thanks to crypto, I have to businesses today, and they really showed me what I want in life. If it wasn’t for crypto, I might have never started to be interested in this stuff.

Categories
Podcast

How to scan the market 08.01.2020

Bitcoin smashing through 40k but rejecting it. The market holds it’s ground and picks up some good trend patterns on the lower time frames. Will we see some new highs till tomorrow?

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Podcast

How to scan the market 06.01.2021

Bitcoin at a new ATH while the Alt market starts to get fired up! Listen and hear where the best moves are to be expected!

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Crypto Blog

Why is Bitcoin changing the way we think?

Bitcoin, the majestic internet bean, has caused quite an uproar in the past two years. Who has not heard of the mighty 300% increase in value from March 2020 to December 2020? Bitcoin resonated not only in the public mind, but investors and venture capitalists have also all turned their heads toward the insane revenues taken out of Bitcoin investments. Now even the governments around the world know that Bitcoin is here to stay. So, what is changing? Let me explore further. 

This article will be quite economical. If you like what you read, please let me know so I post more of my thoughts on this. Stick around till the end. I finish this article off with a short story that presents a world using Bitcoin with no alternative. 

High time preference is a side effect of consumerism driven by inflation. 

High time preferences mean that an individual focuses on his well-being in the present. A person having a high-time preference is rather happy to have their product now than in 30 years. But I understand them, it does not work like this anymore, saving has changed. Since our economies have only seen inflation since the invention of fiat currencies, the average consumer knows and feels the rate of inflation decreasing their purchasing power in the future. The average individual has no other alternative than to store their value in inflation-related assets or exchange it against a store of value subject to volatility related to the fiat market.

Moreover, thanks to inflation, the price of products is rising in the long-term, leaving the purchasing power of most of the population exposed to inflationary shifts. As a result, less money is being saved by the average family, more money must be spent on the same amount of goods without getting a significant increase in their wages. Our economies are clearly built on the idea of consumerism and high-time preference. 

Low time preference is the result of appreciation in the price of the chosen store of value. 

Saving is the best way to explain the features of a low time preference, meaning an individual lies emphasis on his future well-being. Since you expect an appreciation of your value in the long-term, you are more reluctant to consume. This is against all the economic principles we have right now. Consumption is the driving factor of our economy, but more and more people realize that their long-term situation will be worse than the more they spend now. The inflationary monetary system incentivizes consumption through inflation. Sounds like a bad deal now, doesn’t it? 

You are right. It is a bad deal in my eyes too. Now let us see how Bitcoin comes into play here and why it has a massive impact on the way we think. 

Bitcoin is changing our time-preference

Thanks to Bitcoin, you and I understand that we had no choice. There was only one option for many years, but this is changing. Bitcoin offers an alternative. It provides you more than just an alternative. Besides its other qualities, it gives you a sound store of value too. The more people keep holding their Bitcoin, the higher the price of Bitcoin will go in the long term. It is intuitive and easy to grasp. All you need to do is hold on to it, and it will eventually fire you to the moon. This is due to the scarce nature of Bitcoin. Since there are only 21 Million Bitcoin out there and there cannot be made more, the price of Bitcoin is directly subjected to the demand for it. So, if demand never leaves because people know that all they must do is wait to get more value in the long-term, Bitcoin will be bound to increase in the future. More and more people understand that economics should work this way, not how the governments think it works. Bitcoin changes the consumer. 

Bitcoin not only implements the need to save, but it also shows the consumer that their way of living has alternatives to choose from. Bitcoin is the best alternative because it offers an appreciating store of value while being a fully functioning monetary system. This offers opportunities. People start to see how real money should work, and by comparing it to what they have been using before, many begin to understand. 

Before we end this, I would like to show you an insight into a short story I am writing: 

In a world of Bitcoin

As the door opens, the room full of venture capitalists goes quiet. A small but steady man walks into the room, everyone greets him simultaneously. “Hi, Boss.” The short men sit into the small leather chair at the end of the table. The man to his left (wearing the same suit as the men to his right, just the tie is different) gets up and addresses first the boss and then starts speaking clearly into the room. 

Men to his left (Red tie) starts speaking: the situation is concerning. After the last appreciation of the market capitalization, we have seen a backslash as two years ago. We are expecting a depreciation of more than 60% in the coming week.

(Hysterical discussions erupt in the background)

Boss: (slams his fists onto the large wooden table) No one could have foreseen something like this. We thought we could correct the cycle of market corrections and break free of the chains of losing money. 

 Men to his right (blue tie): We need to save our money! What are we going to do?

 Red tie: There is no alternative! 

(Hysterical discussions erupt in the background)

If you like to know more about this story, please leave a like or a comment with a short mention that you liked it. Thanks.

To conclude, thanks to Bitcoin’s nature of scarcity and expected appreciation in value, many start to understand how a currency really should work and what a real store of value should be. This increase in interest is directly reflected in the price of Bitcoin. But why is Bitcoin bull-running now during a pandemic? Can I make a living by trading cryptocurrencies? 

 If you ask yourself questions like this, please check out my website. I have plenty of articles and podcasts that provide you with answers to these questions. I am doing a newsletter, too; the first 100 subscribers are free life-long. 

Categories
Podcast

How scan the markets 4.1.2020

Alt market is on fire! Bitcoin currently pulling back, trend looks in place. The Pullback is needed, the Alt’s do profit.

Categories
Podcast

How to scan the market 31.12.2020

Bitcoin sitting at a new all-time high, the Alt’s aligned to push further too. What a start into the new year. Let’s end the last one with a BANG above 30k!

Categories
Crypto Blog

Five things I wish I knew before starting trading cryptocurrencies

This blog post is by no means my death note. I am still trading. Cryptocurrencies are very volatile, meaning that their value fluctuates at dramatic rates. These fluctuations can cause you to get kicked out of your trade very quickly and are a good reason why you must endure significant losses. Moreover, seeing your numbers going red in the beginning is a further reason for frustration. Head up, because this happens to every one of us. In fact, a trader knows the risks and tolerates that they are hard to avoid. But to be successful in these complex markets, having a wide range of experience is fundamental. Many newbies get kicked out of the market because they underestimate their risk, and they set their time preferences to high. Getting rich quick is very hard while trading and usually only happened when there was significant trade value from the beginning. Keep your head cool. Try to minimize the probability of substantial losses. By doing so, the chances are that you stay in the market for much longer. Staying in the market for longer also means that your likelihood of return increases. 

What I want is that you can stay in the market as long as you can. So, let me give you five tips that keep you in the market for as long as possible. Be sure to stick around till we get to point 5. I got a bit of extra advice ready for you that you don’t hear that often out there. 

  1. Consistency –  This hits the nail on the head and is one of the most critical trading factors. If you are starting, ask yourself: Do I know how markets move? If the answer to this question is no, go and learn it by scanning the charts with a consistent approach. If the answer to this question is yes, the same answer applies, keep on doing what you have been doing. The best thing to do is to create a routine around it. Wake up at 6 am, check the charts, listen to Yves daily podcast, see if anything interesting pops up. If there is not anything worth trading, come back in the afternoon. If there is something worth trading, take the trade but do not forget to come back in the afternoon too! Remember, we are committing to trading to obtain consistency. Seeing charts on a daily basis is the best way to get exposure to as many moves as possible. As soon as you feel comfortable observing the movements, get some experience trading. 
  2. Be willing to lose money – Making mistakes while trading means it involves you losing money. Losing money is a good thing if you get a return that gives you value back. Imagine you standing in front of a vending machine, hungry and willing to sacrifice 2$ in exchange for a delicious chocolate bar. To your despise, you find out that the vending machine takes your money but doesn’t give back that delicious chocolate bar in return. Now imagine, if you lose money while trading without learning a thing from it, you could be throwing your cash just as well into the vending machine described above. Making mistakes and losing money while doing so is fine. It should sting, which will increase your learning curve dramatically. Many fear the loss of money while trading, but you have to understand, with experience comes knowledge, and knowledge is the best weapon against fear. But to obtain knowledge that is practical, experience matters. Experience is worth the money because it will make money back and bring in more if you give yourself the time to grow on your mistakes and bad decisions. 

  3. Trading is nothing you can do while sitting at a party and have a drink with friends – Take your time trading. Dedicate at least an hour a day to trading if you are just starting. But do not be naïve; if you believe that your judgment is spot-on while you are not focusing on your chart, you are massively wrong. The market will be ruthless, and the market will take your money. I lost quite a sum of money because I installed an exchange app on my smartphone. The next thing you see is me taking trades left and right, trading my portfolio into the negative. The day I deleted the app, my portfolio went back into the green. Not because I was not executing trades on my phone anymore, but because I actually had to sit down in front of a screen and commit myself to the charts. Once I got the hang of it, trading started to make sense. You need time, focus, and you need the right mindset to trade. If you cannot align those three criteria, you better not be bothered looking at the charts. 

  4. Trade enough value – The only barrier to entry, practically speaking. In order to trade lucratively, you need quite some money. From experience, starting at 1000$, you are beginning to see some returns high enough to incentivize you to stay; making 1% with a 1000$ means, you make 10$ in profits. If you trade lower than that, you might feel that you aren’t moving into a profitable area with your asset. That is because you genuinely are not moving anywhere. There are maker and taker fees that destroy your return immediately. Trading with lower assets than 1000$ means that you have a lower risk of losing substantial amounts of money, though it is a great way to get started trading. By reducing your order size (the amount of money you invest), you effectively reduce your risk. 

 Be sure to have that notebook ready because the last tip influenced my trading immensely:

  • Stop looking for trades to take; start looking for trades not to take – The common mistake I have been making by myself and seen done by people I am trying to teach trading is that they think that they must find the perfect trade to take. However, this is the crypto market, so remember, volatility can bite you in the ass if you do not keep an eye open. Even the perfect setup can be a negative trade. Change your mentality; try to start focusing on not taking a trade. As soon as you start focusing on the fact that preserving money is far more challenging than spending it, you see everything in a different light. By virtually eliminating every possible trade option because of a fixed base of rules is the perfect way to combine everything taught until now. By having those rules and only trading after these rules, you become consistent. If something is out of line, you stay out of the trade. If there is a big candle before your entry, it does not fit into your set of rules, walk away. 

Trading is about reducing risk by failing and succeeding again, and again, and again. There is a good reason why consistency is at the top of this list. The clue to success lies in how you bend the probabilities of success and failure. It would help if you experienced winning and losing money, be sure to learn as much as you can from every piece of information you can lay your hands on and take your time and space to commit. The faster you build your routine around trading, the quicker you become good at it. The better you become at analyzing, assessing, and executing trades in the cryptocurrency market, the easier it will be to trade the market. 

Every trader experiences a dead end at some point; getting a mentor will help you for sure. Be careful with doing courses out there and only learn from someone you could eat dinner with. Otherwise, they might not be able to connect with you and teach you how to trade. If you need consultation, don’t hesitate to contact me.