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Crypto Research

How did crypto go wrong this year

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As we approach the end of this year, everyone is still digesting the impact of the Internet-driven digital transformation in business and its associated headwinds. As a result, many businesses are looking ahead to the future with mixed feelings. On one hand, we have come a long way in building trust and self-awareness in our digital landscapes. On the other, we now have to acknowledge that some of these digital transformation efforts have been misguided or backward-looking. These are all good things—but they do not mean 2022 will be a great year for crypto. 

It’s hard to know what to take away from this year.

More crypto companies were bankrupted from Luna to 3AC to FTX and lost investors’ money. This is a classic ponzi scheme in which everyone misued users’ funds and steals to hedge their high risky bets, eventually leading to the collapse of everything. Crypto itself has nothing to do with all these business models of stealing people’s money, and it is a way they advertise and bring FOMO to people and lure their money into the space.

Everyone is working toward their own digital currency

While cryptocurrency is not done yet, countries have been tested their own CBDCs. It is a crypto-like digital currency without privacy. However, it can be a saver choice for many people to adopt.

Lesson Learned

What have we learned from this year? We need to go back to the fundamentals of crypto. Transparency, privacy, and permissionless are keys to making crypto unique. When crypto is suddenly worth ten folders, we abandon the fundamentals and chase money, making us vulnerable to scammers. We need to rethink why we joined and believe in crypto at the first place.

Conclusion

Crypto will be used in financial services. It will also likely find use in both the financial market and in the form of insurance eventually. In fact, insurance providers may be the first major players to embrace digital insurance—and this may include a blockchain-based platform. The ecosystem will vary from company to company, but most will have an online platform that facilitates the digital purchase, sale and management of coverage across multiple providers. However, to screen out bad actors before such adoption is a key to making crypto sustainable in the future.

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Crypto Research

Say no to FOMO

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Do not FOMO into crypto. This is the rule that prevents you from becoming a bag holder.

ChatGPT suggested that FOMO is:

FOMO stands for “Fear Of Missing Out.” It refers to the social anxiety or feeling of regret over the potential missed opportunities, experiences or social events that others are enjoying or participating in.

You will see every social media platform where people shilled their crypto portfolios and told you how you missed the train.

This is not true.

Remember, there is never missing out of the train in the crypto because it is inefficient to sustain at the peak level for a longer time.

Rather, it will go down every time without problems.

You should do your research carefully and exam around the market sentiment.

When everyone says you are missing out, it is a time that the market is about its peak and hype.

You need to stay away from the social media and observe to see how the market performs. 

When everyone says the crypto is not more extended work, you should prepare to see how it may prepare itself to come back.

It is not always the case, but it usually works this way.

Do not influence by the social media shiller but trust your research!

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Crypto Research

Crypto is a good investment or not

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Many people buy crypto to believe it is a great investment. However, it may not be the case.

I asked ChatGPT about the crypto investment and here it is:

Investing in cryptocurrency can be a good opportunity, but it also comes with high risk and volatility. It is important to thoroughly research and understand the cryptocurrency market before investing. Additionally, it is recommended to diversify your investment portfolio and not to invest more than you can afford to lose.

Here are some misconceptions:

First, crypto is not a traditional investment that requires a conventional way to invest. Instead, it is a catch-or-miss investment that you really need to time the market to make profits.

Second, you do not need to hold for too long if you need money quickly. Crypto tends to perform badly long term than average assets did.

Third, high risk only sometimes has high rewards. Many crypto with high risks may not ever provide high returns eventually and many go to zero instead.

Last, do not go FOMO because you are likely to become a bagholder.

There is not missing out and it is too late in the crypto. Rather, you should always keep an eye on the market.

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Crypto Research

Mother of all bubble

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We are heading into a bubble economy and there is one that is about to pop.

ChatGPT suggests that a financial bubble is:

A financial bubble is a situation in which the price of an asset, such as a stock or a commodity, becomes artificially inflated due to excessive speculation and investment. This can lead to a situation where the market becomes overvalued and eventually collapses, resulting in significant losses for investors. Bubbles can occur in a variety of different markets and can be caused by a number of factors, including low interest rates, economic growth, and investor sentiment.

Let’s take Tesla as an example.

Tesla CEO is Elon Musk, who purchased Twitter last year and believed the company can help Tesla to make more profits.

Does it? Or he tried to inflate Tesla instead?

If you go to Twitter, there is less opposition than a supporting voice.

Elon Musk sells Tesla cars and Tesla stocks.

People purchase cars to help pump the stock price and when stock price goes up, people want a new Tesla.

Despite all the bad reviews about the car and its questionable autopilot feature, Tesla cars sold quickly and stock goes up no question.

Is this a Ponzi scheme?

Similarly, cryptocurrency is also highly speculative.

It goes up a time to time, but people buy the narrative without further investigating how useful the crypto really is.

What if people stop buying the crypto, will that still go up?

What if the economy is so bad and the interest rate is high that people have less money to buy more crypto?

We will see how it goes.

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