Looking for a big score?
When a lot of people first get into crypto, they have dreams of striking it rich, no matter what they actually put in. I have witnessed several of my friends over the years buy some Bitcoin or some Eth, and then almost religiously watch the prices, looking at them fluctuate up and down, gain and loss. It doesn't seem to matter how much they invested, the emotions are still there, feeling good and bad, based on seeing a few dollars in the green, or a few dollars in the red.
And one aspect I find interesting is that it doesn't seem to matter what kind of person they are, as once they have bought some crypto, the dreams of getting that big payoff looms large. For instance, one person bought a couple of thousand worth of Bitcoin when it was at around 40K, back in 2021. They were happy when it went over 50%, and they were sad when it went down to 15K again later. But, rather than buying more at 15, they are just waiting for it to go back up again. Now, it is at ATH levels over 71K, and they are about 70% up on their initial investment. Not bad for sure. However, how far does it have to go in order to be significant to them?
And this is the thing, because they were able to put a couple thousand in a few years ago, but for it to be significant it would likely need to go somewhere like 10x on the purchase price, so up to about 400K. The reason is that at that level it would give them an amount that they wouldn't be willing to spend under normal circumstances, or at least, not without a lot of thought. How long will they have to wait until it is 400, is anyone's guess, but I guess it isn't going to make it there this cycle.
But even if it does, do you think my friend is going to be happy taking 18K, when he also realizes that he could have bought several more thousand over the last few years and put his stack of Bitcoin up by 10x due to the average price, and then gone another 10x on top of the profits instead? A couple hundred thousand is very significant for him.
One of the problems with the "big score" thinking is that nothing else needs to be done, that investing is a set and forget process and if you just wait, the good times will roll. In some cases this might be true, but it is going to depend a lot on luck, and then of course, the amount invested. Not many people have invested a small amount once, and then have it return very large - in the grand scheme of things. The reason is that most people will take the profit at 10x, 20, 100x, but not everyone is going to buy back in for when it goes 1000x, 10,000, or 1,480,000x like Bitcoin has over the last 14 years.
Sure, at that point it would have been possible to buy 100 bitcoin for $4.80, but unless you lost the keys and then rediscovered them, most people would have sold. Well, all except the people who believed in Bitcoin and are holding, and holding, and holding.
The fact is though, is that humans aren't built for investing, as our mindset is about getting that dopamine kick right now. We want our needs satisfied as quickly as possible, and we don't want to expose ourselves to potential loss, and we like to have what we bought in our hands, when we buy it. We are built to live in the moment, but we have built a world that in order to be successful in it financially, we have to think ahead, plan, invest, be open to risk, and be patient. The patience doesn't mean no activity whilst waiting, it means to be patient for the outcome that the activity leads to.
For instance, my set and forget friend while waiting, could have been building his understanding of the cryptosphere, getting familiar with the tech, considering the value propositions, and working out just why there is a level of inevitability to it. If he had, he likely would have been hooked like so many others who have dived deeper, and bought that dip. Instead, when it hits some magical number, he will tap that button,
for a single sell.
Taraz
[ Gen1: Hive ]
