Hey everyone. I saw what I thought was a spot on post regarding the Atala fears on Reddit. Original thread here:
I copied the post below:
**DamonAndTheSea 65 points 9 hours ago **
I wish the anxiety ridden ‘investors’ would just be more honest and volunteer that their doubts stem almost completely from price action. My impression is that these skeptics entered into crypto on the last wave when velocity was rocketing all projects 100x in a matter of weeks and doing so completely absent of fundamental value. It’s important to remember that markets are irrational which allows savvy investors the opportunity to exploit the delta between sentiment and real value. The naive expectation is that markets will again 100x in this current interstitial, which if you’ve studied markets, you’d know is just not going to happen soon. It’s important to consider market phase when making investments, and then have a fitted strategy.
The parabolic rise in BTC and alts in late 2017 was built on the foundation of a 3 year bullish impulse driven by BTC adoption starting in 2015. Bitcoin is the tide that raises all ships, and if you study Bitcoin’s price history, or even the SPY or DOW, you’ll see 3 different market phases: Bull cycle, bear cycle (generally shorter) and then a consolidation period before another bull cycle emerges. We’ve spent the requisite amount of time in a bear cycle in 2018 and only recently has Bitcoin entered into what looks like a consolidation phase with price slowly turning bullish again. If you’re investing in alts, you absolutely need to follow BTC until the market matures in such a way that alt projects can really decouple from the risk-on experiment that is crypto. BTC is only 10 years old which makes it a baby compared to traditional instruments.
I tend to look at 3 different things when making an investment, and these attributes are what VC’s examine as well when choosing to invest in a start-up or fledgling project:
1) Product: What is the group building and how does it work?
2) Team: What is the team’s track record and are they equipped to execute on their plan.
3) Market: Is the market demanding this kind of product?
Cardano is, in my view, the most promising investment in the utility platform space in the sense that they are building out a decentralized Dapp platform that may contend with ETH; their team is top notch and CH has a proven track record of attaching himself to winners; the market is still a bit of a question mark as it’s unclear how much real adoption will happen in the short run, but it’s difficult to dismiss the idea that decentralized networks will claim some real value moving into the next decade.
Cardano is a speculative investment with high risk and potentially high rewards. If they deliver on their promises, they will claim a large portion of the utility coin market share as more mature Dapps are developed on a framework that mates with consumer demand and can scale fluidly over time. But we don’t know if this happen, nor do we even know that this model will find real demand in the short term. It’s important to remember that no current incumbent has proved that POS works at scale, and so the notion of ‘first mover advantage’ is erroneous. We’ve seen the first version of flight, but no jetliners; this transition will take some time. This is the bet you’re making if you’re an investor; you’re betting on decentralized networks becoming a new model for how people transact and make decisions as a collective free from the censorship and power consolidations seen in traditional centralized systems.
Like many of you, I bought back into Cardano on the way down with an avg coin price of $0.13 and would love to see my investment 10x but I’m very patient and don’t see any reason to abandon the project right now. If I were to abandon the project it would be for the following reasons:
1) They begin laying of engineers and their github commit count starts to wane coupled with further delays and murky promises on release dates. So far, I don’t see this happening. I created a post not to long ago which examined the ‘Dev Report’ by Electric Capital which did a deep dive into real work being done in the space. This report is worth reviewing and shows that Cardano ranks highest amongst competitors in their code commits measured against network value. This is an important metric as it shows that a tremendous amount of money is being spent on development and when squared against negative sentiment in the bear market, provides an opportunity for long term investors.
2) CH publicly announces he’s abandoning the project. While in the long term, Cardano doesn’t need CH as the network transitions from an internal and federated model to a decentralized model driven by governance, if he were to quit the project tomorrow, I’d be inclined to offload some of my holdings as the project does need centralized leadership in the current state.
3) Dapps do not find a level of adoption promised by the starting principles driving the project. If Cardano and like competitors are resigned to a “Google glass” outcome (i.e. Cool idea, but no one wants to actually use it), then I’d be inclined to sell my stake and move that capital to more promising investments.
CH is right. People need to chill. Close your browser and check price later this year. If we go through another boom cycle, you’ll want to hold into 2022 an minimum. The people who make the most money in any market have patience as well as capacity to move their capital into more promising instruments once the writing is on the wall. Short term news cycles will shake out the weak hands because they fail to see the larger picture and this happens in every market. I’m reminded of Amazon which went from $110 to $5 during the 2000 crash. Because Amazon was always playing the long game, they rewarded shrewd investors with massive gains in the following cycle.
Best of luck to everyone.
Here is a link to the Dev report he references. Definitely worth a look: