There has never been such an unprecedented event in investment history, and unfortunately for all of us we just happen to invest at this time.Sorry for your loss everyone.
It is very lucky indeed, what a wonderful time to buy crypto-currency!
Markets will recover, don’t panic you might need some patience though.
Yes, there has, many. Just before your time.
Also this event has nothing to do with the Coronavirus, the Coronavirus just popped the largest bubble in History which is the current US economy and thanks to 40 years of propping and interfering by the Federal Reserve.
Right now all speculation and overvaluation across all asset classes are being deflated. This was already written in stone to happen 10 years ago. It was just a question about what “event” would prick the bubble, that part was always the hardest to predict. Not whether it would happen or not.
This has just begun, I don’t see any way we can come back from this and keep the bubble alive with Covid putting pressure on everything. This will be the final liquidation. The federal reserve will high likely step in with the biggest stimulus ever to be seen, the next phase ensuing is the collapse of the dollar as well.
The worst thing, even when it all collapses, we might not even do the right thing, but instead go full socialist (which will prolong the depression for decades to come, if this is to happen) China will be quickly move in, and the power balance between the West and East has once again reversed, history again repeating itself.
There is simply no room for speculative assets like Bitcoin which is (99% speculation) to hold any value under such environment and it will be liquidated with everything else. Bitcoin never managed to become Money yet (and there are good reasons for this)
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Been a while JB!
@Donnybaseball It has for sure! Got occupied with other things 
Still checking in once in a while. Just had to reduce my time on the typer… Good to see you still around!
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Not going anywhere. For better or worse I’ve drank the cool-aid!
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Bitcoin will be liquidated with everything else you say.Including ADA?
Yes, since the same component is in play for ADA as well. This won’t change until you have demand that is not based in speculation, something potentially in theory ADA can have (which Bitcoin never can), but doesnt have yet. First you would need the product to be live, after that, you need actual users. Not people buying ADA to buy ADA - but people buying ADA to use them for X - where only ADA can be used. This would make ADA a digital commodity and make a platform for it also being “money”
Until (or if) this materializes the actual real value of ADA is 0, any value attributed to ADA at the before this, is a bet on on the potential future commodity value even though today, it is worth 0. That is why the price of ADA and Bitcoin is 100% speculation at this point, it is the only demand/supply in the market. Hence why it will be liquidated with every other risk assets, crypto being very high on that list. This is why the whole Crypto market moves together, because they are not different, they are all the same thing at this point. All “potentials” for “something” but the same “something”. The one thing where ADA differs from Bitcoin, is it actually in theory could work, where as Bitcoin really never can, if it cannot be commoditized, it can never be money.
With Bitcoin having 0 potential as a commodity, and with no central authority to artificially put the framework in place for it to act as money, it will eventually revert back to Its true value of 0. It doesn’t matter how high it goes, or even if it has another “run up” it will be impossible for it to sustain value. As contrary to popular belief, markets don’t revolve around what people “feel” or “believe” something should do or be priced at.
Regarding ADA it will be a very long term thing to see whether or not things bear fruit - as the days of “free money” and gigantic appreciation based on “nothing” are probably over, and we are reverting back to tech and actual usage.
Which is good
The fail of BTC will probably lower valuations across the board, cause people wont understand why BTC failed, and it will put every project into question. One could have hoped that ADA had risen, before that day would come. Even if it is not the case, if there is value or usage, it will be realized in the future even if its many years from now and despite BTCs fall. But who knows, technically BTC could go for another run, I just doubt it TBH, each time it takes more and more money.
Regarding ADA. Personally I still don’t see it be inevitable, I still haven’t seen many specific use-cases that are like no-brainers. But this is not my expertise, what “public” blockchains in this function can and cannot be used for. Charles seems to have the vision for this, so I’ll let him show that part. This is of no interest to me, the market will figure that out on its own. I am just here for tail end exposure.
And yeah personally I would love there to be something alike to decentralized digital gold in the market place, that would be absolutely awesome. So I am for sure cheering for some project to come out with something viable.
Also, I really think this space could use people who know the economic inner working of things, as Its filled with techies that do not fully understand all econ aspects of their own products. Like it really bothers that Charles haven’t denounced Bitcoin for Its flaws, cause if BTC goes 0 before Cardano goes to market. He stands lose to lose a lot of credibility - how is he going to explain this away after the fact - I still do not know to this day if he did this for “political” reasons or that he does not know himself.
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This is an extremely interesting piece you have written.l have not had ADA explained to me like this before. I would never had started accumulation of ADA if l had read your comments before. Too late now,we are screwed.Thanks for taking the time to write this.
I know, It kinda isn’t common knowledge. But it should be. Unfortunately this goes for the whole space. This is not just ADA, it is basically the whole space. What I am saying is not necessarily that you shouldn’t buy into something, and you are not necessarily screwed. But when people don’t know what they are fully getting into, you can make wrong decisions or go overboard into something, expecting something else.
The way you should approach it is like this. Either It’s going way up, to a market cap of 300-500B and above or it goes to 0. So ADA being a 500M cap project atm, if it ever gains scale, you are looking at a 500-1000x+ return. But there is no middle ground, it either goes big, or it goes to 0.
This is not just ADA, this goes for pretty much 99% of other projects I’ve come across.
So you should invest accordingly - and stick for the long term. There is very little way of “playing the market” because you never really know when things take off etc. So you just build up your position slowly, and buy in on down-moves and use Market cap as your main tool for appropriating a valuation worth the risk/reward - and then you stop looking at it, do something else. It doesn’t matter if you are sitting at loss, getting in at 1b cap, 2b cap etc. Because the end goal is much higher, in case of success.
If you already got a large position for you personally, and sitting at 80-90% loss, you don’t need to keep buying in even if it goes much lower, cause if it succeeds, it will go much higher than anywhere you bought in at. So don’t worry about catching a bottom or averaging down. You should just write it off in your head, keep your account info, don’t look at it, and go do something else, cause things will take years to play out and there is no way to “time” this by getting in after the fact.
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Interesting write-up, thanks.
A bit of a tangent, but: as a longtime EVE Online player, where the cardinal rule is to never ever fly what you can’t afford to lose, I always approached crypto the same way. Spread out resources and risks at every level, so no single bad choice (or even a cascade of them) can ruin you…
I’m constantly amazed (but no longer surprised) by the sheer amount of people who just don’t do their due diligence and go all in to “get rich like bitcoin”, only to crash and burn.
Exactly what you say,l have been doing, buying in more,more for two years as it goes lower,looking all the time,etc etc.Now l am going to 100% take your advice,and go do something else,come back and look in a few years.jb455,thanks ever so much,my quality of life will improve greatly because of your advise.All the best to you and your investments.
You clearly have it all mapped out in your head and what you are saying could totally happen and in many ways makes a lot of sense.
However, I just don’t see it as being such a certainty that the US Dollar will or will be allowed to collapse and things won’t bubble again because of Covid-19, markets are rallying even today and I believe they will again once we move past this pandemic and come out of the other side globally.
So regarding the dollar collapse, yes this is not a 100% certainty since its fully depended on the actions of the FED. However it is the most likely course of action since there are only two decisions they can make. To save the dollar, they are going to have to let stocks/bonds drop, let banks and the federal government fail and default on their loans. This is the correct course of action, this would save the dollar and let the restructure take place in a honest manner. Very painful, but it has to do be done to start from a fresh and actually build a solid, real and lasting economy. However, they are more likely to try and bail everyone out and at the expensive of the US dollar. Since the bailout involves having to “print” and monetize debt in a exuberant amount . The problem with this is approach is you have to continue to do bigger and bigger amounts to keep things going, since you are not actually fixing anything, you merely kick the can down the road. Masking as a “FIX”. This irresponsible process started 50 years ago with the first step being decoupling from Gold that previously acted as a safeguard against this. Take a look at the FED balance sheet, and US gov debt, It is moving exponential and accelerates to a unsustainable amount into the endgame till it finally stops working.
This experiment being called Keynesian economics and Modern monetary theory. Hopefully finally discredited when everything blows up once and for all. Nothing more than fairy tales and pseudoscience.
Collapsing the dollar and bailing everyone out won’t work either, in fact it will make everything worse! Since you are preventing the market from fixing everything in the most efficient manner by intervening in the process - and the international trust in the reserve currency and the US will be tarnished forever - the reserve currency “premium” embedded in the value will be lost.
Regardless if the Dollar collapses or not. This doesn’t change the inevitable collapse of the US economy. The only difference being how you would approach protecting yourself financially.
FED doesn’t collapse the dollar, and lets everything reset = Cash is king
FED does collapse the dollar = Gold and certain commodities is king, and to a lesser degree could be some great opportunities in foreign stocks especially in ASIA and China - although that would carry risk gold does not have.
Regarding Covid19 being the domino that starts everything, there is a chance it aint, of course. From my perspective Id set a 95% probability it will, it would be a miracle if this isn’t it. Markets recovering, doesn’t change anything, things wont go straight down. There will be many periods of “relief” just to be followed by the next domino of a negative event that will push things further. The events don’t matter, cause they are just symptoms of the underlying disease. So yeah don’t expect a straight route down, even if this is the final phase.
For anyone interested, here is a pic of balance sheet of the FED. Note This doesn’t go further than 2010. Right now we are at 4.3, but expect this to explode over the coming months/years as we continue to march towards endgame.
Thank-you very much for taking the time to write such a comprehensive response, really appreciated.
I did study economics at A-Level (British Education) but you’ve reminded me that I really need to refresh that knowledge and learn some more too.
Do you think there are any other options/ways they could worm around it and avoid having the Dollar collapse without having to make either of those two decisions? I just feel like in life, those with the power and the vested interest in maintaining the value of something tend to find a sneaky way, - particularly where someone like Trump would no doubt be involved in the decision making process on some level.
What are you talking about?
Best opportunity ever.
Just buy & hodl.
Yeah economics is a interesting subject, as once understood it allows you to glimpse into the future as it follows strict laws that cannot be broken.
To answer your question there are two aspects to it.
First, if there is any way the collapse could be avoided and nullified. Technically yes, but we would have to involve highly unlikely and high flyer ideas. That they are not worth taking into account for a probable outcome for decisions to be made on. To give you an idea of some. A meeting with a highly technology alien civilization that shared their tech with the world/ or US that would increase our productivity thousand folds. Like being able to produce food at the cost of nothing, being able to produce products at the cost of nothing, or close to. Something like this, could technically avert a disaster and make up for all of the mistakes of the past and offset any downsides, even increase the quality of life by magnitudes for the avg person. The same could be said for the invention of true A.I with infinite scaling, which would have similar effects. While the ladder (A.I) might be be something that will actually probably happen, It is unlikely to happen anytime soon. Other things could be a energy source that would be at close to free levels.
While there are more, these are some of the crazy ideas we would have to be working with for something like this to be avoided as - and none of these things would take place overnight - which is pretty much needed.
In fact, this has actually happened in history before. The industrial revolution, actually saved many countries from what would have else been complete disasters with their current economic paths. So things like this, “by coincidence” has happened before averting disasters in the past.
The second point being the will of the people in power, or any schemes they could take part in.
I think people often tend to overestimate these people, assuming that they themselves actually know what is going on. In most cases, this is not the case at all. The last chairman of the federal reserve that actually had some clue about the economy and money was probably Greenspan He was though politically pressured into bad decisions, that he himself knew was wrong, but he wasn’t able to be honest about it as there are other mechanics in play.
Ben Bernanke, Janet Ellen and the likes, if you study them over time you find out that they are literally clueless, they are not even lying, they truly believe that what they are doing is “good” “necessary” and the “right thing” in their cases it is not even due to political pressure. However there are examples where it most likely is, like Greenspan.
But let’s say we play with the idea that they actually know what’s going on, no there is still nothing they can put in place to avoid the outcome - they are not bigger than the market itself - and keep in mind they are playing against competing forces (other nations) that have just as big self-interest not aligning with the US.
I know we are not only talking about FED chairman’s at this point, but a broader spectrum of people in power. But if they themselves are clueless in the proposition they are in, which means they are just as clueless for how to navigate a path out of this predicament. For the most part they will be just as shocked themselves, they won’t see it coming, or even understand why or how it did. Which leaves no option for them even formulating any sneaky way to maintain such “power” or “status quo” - they are not know-all gods who are playing a game of 4d-chess with the world - most of them are merely passengers on the train. I know this is something that is for many hard to accept, but the evidence for this is overwhelming. The only way to fully see this for yourself, is not by listening to me, or someone else.
It is to fully understand the subject on such fundamentally deep level - that you have no need to refer to any material, person, so called “experts”, ideologies, etc. - You must know all mechanics and concepts on a fundamental level that you can apply them to any problem or situation
Where you both understand the truth, as well as understanding where misbeliefs or counter opinions originate. By gathering the full puzzle not only can you see the truth, but you are able to understand all pieces of the puzzle and how it all interconnects.
Unfortunately, the end result is inescapable.
In one way, it should be seen as positive since the collapse is the cure, it is what will fix everything if it was led to happen naturally. The collapse was never the problem, the problem was all of the actions before that led up to it. The biggest issue is that people don’t, even after the fact know what led to the cause of the problems, hence using the wrong tools to try and fix it. My biggest worry is that we go down the communism/socialism route, destroy capitalism and we will prolong the collapse into a decades long of suffering or even to a point where the country itself self-destructs forming many others.
Many aspects of how a economy works is so counterintuitive that it fools even the most intelligent of people. Not because it is hard to understand, but that it is counterintuitive to human nature itself.