2018 was a roller coaster year for cryptoasset holders, investors and enthusiasts alike. The year saw exuberant highs of both prices and emotions, to bear market conditions and 70%+ losses across the board. If 2017 was the ride up to the moon, 2018 was certainly the ride down to reality. Despite this, many continued to weather the stormy months of 2018. But, why?
As the total market cap and valuations peaked in early 2018, it fizzled out and retraced its price gradually throughout the year, back to levels akin to summer 2017. FOMO and FUD levels reached epic proportions, where celebrities and influencers were literally thrown money to Tweet about the token/ICO of the month.
For those who invested when the price for Bitcoin (BTC) was $5000, $10,000 and then $20,000, the gradual bottoming out process has been a rude awakening: never invest more than you can afford to lose, and never invest in something you don’t understand.
Diversifying is one thing, but putting all your eggs into a magical crypto basket rarely ends well.
Indeed, many have folded and called it quits: investors, businesses, jobs–all of these seemed to go as quickly as they came. Here at bitfudge, we don’t necessarily view this as a bad thing: weaker and overly speculative positions have been shaken out. The market value is gradually re-established on what we hope to be firmer ground.
S’all Vol’, Y’all
Anyone looking at the charts from 2017 with twenty-twenty hindsight (isn’t that a grand thing?) can see that the growth was quick, volatile and based on highly speculative positions. Hopefully we have learned a few hard lessons along the way: if and when the bull cycle returns, lesser volatility should be expected. We support digital asset adoption: that means stability.
Volatility can be a healthy thing, but we believe that better adoption comes from less volatility, allowing for more retail usage. The volatility in price and transaction performance in 2017 and 2018 have left most assets–especially the major ones–functionally unusable at times for retail purposes.
Macro Events Matter
Summer turned to autumn,
and the leaves fell gently to the ground.
So too, did the global financial markets.
As tech stocks, equities and markets globally turned bearish, the already exhausted cryptoasset market felt the pinch. Media didn’t help the situation, quickly decrying (yet again), the impending demise of cryptocurrencies. This was the finishing blow for many investors, already on shaky ground, perhaps even in the red. Enough was enough, and fair enough, they exited the scene en masse.
No surprise, that the autumn of 2018 then saw a drop below what were thought to be established floors, and the price quickly plummeted to the low $3000 levels as tne exodus wore on.
That is, unless you’re doing arbitrage, scraping/daytrading, or otherwise thriving on the volatility. If you’ve been catching the falling knife successfully in 2018, you may have walked away with very heavy pockets, indeed.
Yet, despite the hammering the year ended with more bullish signals, a positive indication for some. Some believe the end of the bear cycle is here/near, others are waiting for a further bottoming out.
Business As Usual
Many investors continue to HODL. Some are in the red and awaiting for a return to greener pastures: common for anyone who dealt with altcoins during 2017 and 2018. Others increased their positions during 2017 and are happy to weather the storm. For some, it’s on principled grounds: the steadfast HODLer.
For positions from before summer 2017, the situation may seem less concerning. Volatility is a natural part of any emerging market, digital assets are no different. Long-term strategists who still believe in the stuff, may shrug this off as yet another bull-bear cycle, not the first they have survived, nor the last.
The fact is that the vast majority of our readership are intelligent individuals who have not overgeared their positions. If you’re not relying on your digital asset portfolio to buy your food, perhaps the situation isn’t really that dire. If you’ve got a healthy portfolio balanced with your other investments, you’re in a much safer position. If your strategic plan is a bit more refined than “moon, then buy yacht and lambos”, your realistic expectations will have kept you in check.
Whatever your position, take a step back from the barrage of news streaming your way. Take a macro view of events, and filter out the junk: 2018 has been an exciting year: full of blockchain adoption by businesses. There’s been major technological development across most legitimate blockchains, large and small. It’s flushed out dodgy ICOs and cooled overspeculation.
Show Me The Fudge
Next phase: more realistic, widespread adoption.
There will always be the FUD-maker: the boy who cries wolf. Equally, there will always be the FOMO-maker: the boy who cries moon. As individuals we must learn to recognize and properly assess information presented to us and become our own judges.
One only needs to look at our homepage, or other outlets with long term visions: one story after another about blockchain adoption. When you can cut out the cruft, it’s not such a bewildering space. Keep sight of the bigger picture, and remove yourself from the day-to-day bombardment of information.
What emerges is a clearer narrative. One that is full of increasing innovation and adoption.
Is legitimate blockchain adoption on the rise? Let us know what you think in the comments below,