Why I’ve Stopped Buying Crypto (For Now)
I’m still holding on to all of my coins/tokens, but I’m holding off on buying anymore right now.
This is probably not the advice you were expecting to hear from me (aka the world’s most enthusiastic HODLer), so allow me to explain.
I’ve seen several people on Reddit compare the current crypto bear market to the 2018-19 bear market. Their argument is that the current bear market presents many excellent buying opportunities, allowing you to stack up on all your favourite cryptocurrencies and tokens at a hefty discount. Sounds good, right?
But hold on a minute.
The 2018-19 crypto bear market was (largely, speaking) a crypto downturn.
Yes, sure, there were some serious issues going on with the wider economy and cracks were starting to show in mid-late 2019 indicating that we might have entered a recession in 2020 had it not been for COVID, but these “macro” issues were NOTHING compared to what we’re experiencing today.
Crypto markets were also more decoupled from the wider economy in 2018-19.
I think there is a very real risk that we might head into a recession. I’m not alone in thinking that as economic forecasters predict that we’re at a 28% risk of recession. They keep raising their forecasts everyday though. Personally, I think we’re at a 50% risk of a recession, but that’s a discussion for another day.
The reason why I’m concerned is that we really don’t know what a recession caused by the biggest bubble and worse political leadership in modern history will look like.
It could last for a couple of years, but considering everything going on right now, that recession could very well last the entire decade!
We just don’t know.
So? I know you think crypto is this powerful idea that can overcome anything. And while yes, I think Bitcoin (BTC) will almost certainly survive a decade-long recession, I doubt I can say the same about all our favourite altcoins.
The fact is, most of these projects still need regular cash injections to stay afloat.
They certainly won’t survive a decade long recession and most are unlikely to last a couple of years without fresh funding.
The reason many of these altcoins projects survived the 2018-19 bear market is because back then there was still a lot of money looking for companies and ideas to invest in.
2022 is just not the same bag of worms, so please stop comparing it to 2018-19.
If you must buy something though, please make it BTC, though if we do plunge in a recession, I’m sure you can buy all the BTC you want over the next 2+ years. Goodnight.