Every four years our bags get huge and everyone collectively loses their minds, but very rarely do we ever sell anything. There are no rules, number can always go higher, and it's essentially impossible to sell the pico top, leading to financial pain either way.
Surprisingly the story of doing a full round-trip on the gains is the common one, while tales of Lambo and Generational Wealth are much more rare, but also go more viral, leading to extreme survivorship bias. This type of behavior greatly inhibits the ability to tell what is real and what is not. If we only listened to the hype everyone would assume that we're all multi-millionaires by now. It's such a popular concept by now there are dozens of social media memes that reflect it.
Ironically a lot of us aren't filthy rich because we tried to be rich. Crypto provided us with plenty of money, but rather than rebalance our positions responsibly we just let 100% of our money ride into the next bet. After all if it came this far it can easily pull another 10x, right? Nobody wants to swing early and be the one to miss out on those sweet gains during peak FOMO.
FOMO creates a collective delusional state in which everyone convinces each other to bask in financial irresponsibility. After all, even if the price were to collapse 50%, we're all pretty rich so who cares? Except the huge problem here is that when it does end up crashing 50% nobody wants to capitulate as the survivorship bias transitions into sunk-cost fallacy. In for a penny, in for a Pound, as they say. Why sell here when a recovery is "imminent"?
Of course then everything is down 75%-90%... and shockingly often we see people ride their bags down a full 99% in lost value... which is just insane when you think about it. Memecoins are not going to have fun next bear market, just like NFTs, DEFI, and the ICOs that came before them. And of course that's when people sell because "it's so over". And for a lot of assets it actually is completely over as they bleed out to zero, but anything that's already survived a bear market tends to stick around.
If greed is the problem, do we fight against it or lean into it somehow in a less toxic way? Crypto is not a zero-sum game in which someone has to lose in order for another person to win, but it often gets framed this way by vulture capitalists that don't know any other way. This ship rises and falls together with the tide.
There are many psychological tricks at our disposal that can be used to rationalize the decisions we should be making anyway. If our favorite coin is already up 10x... wouldn't we like to defend that price point in the future? Seeing as our unit of measurement for everything is USD, that's what you'd need to sell for to defend that price.
There are also the "moonbag" longshot assets that can go x100 or more due to high volatility and low market cap. My experience with those ones is that you'll never be mad long term if you sell around x80 (like everything... not DCA or any of that type of nonsense). Nothing has ever spiked that hard and been able to also maintain a floor that high. What goes up must come down.
There is also a lot more infrastructure available to help us manage our finances in a more safe and productive way. Pairing an asset to USD in a liquidity pool forces us to sell half of the bag into USD just to enter the pool. We can then earn yield on top of that to sweeten the deal. This doesn't take into account the systemic risk of using wrapped tokens but it's actually been a long time since we've see in any big failures; for the most part the kinks in defi have been completely ironed out.
HBD also still has 15% yield, which I imagine will be pretty valuable when everyone's bags are huge again. HBD is a little known asset to the cryptosphere at large, which actually seems to be a huge benefit for those who actually use it. The trade is very uncrowded, making the debt ratio low, manageable, and more importantly safe and guaranteed to be pegged to the dollar down to a price point of 5-cent Hive.
Very few of us actually capitalized on HBD even when the yield was 20% and the 4-year cycle was telling us it was bear market time. Denial is a helluva thing. IMO HBD is a killer asset and way safer than an LP, which suffers from both impermanent losses (buying the dip) and centrally wrapped assets.
Don't be greedy. Much easier said than done, but my experience is that greed is punished in crypto one way or another, be it losing 99% of your net worth or being jailed for 30 years degen gambling when customer funds like FTX. Best to avoid such happenstances. Point being: when you feel like you've finally made it... don't just sit there and ride it back to zero. Maybe this is something everyone needs to do at least once, or maybe we can pave this path we've forged through the jungle so it's not such a harsh journey for the ones that come later.
