A Follow-Up on Previous Crypto Post
Am I too late to invest in crypto now?
Hey everyone,
Crypto is on the move, and everyone I know is asking me about it, so another post was warranted.
DISCLAIMER: All investment and financial opinions expressed in this newsletter are based on personal research and experience. The information presented should be used as educational material and not financial advice. Use this as a starting point for your research and make your own decisions.
Why?
When I made the post in September, Bitcoin's price ranged from 60 to 70 thousand USD, and now it sits comfortably at 100 thousand USD. What happened?
Basic supply and demand.
Bitcoin goes through this process called ‘The Halving’ every four years, and 2024 was one of those ‘halving’ years. That event cuts the Bitcoin reward given to miners by half, making it so that there is less selling pressure on the markets from these people. Leading to less supply in the market.
Also:
Many institutions, like Blackrock, were increasing their crypto positions by the billions every day (which is publicly verifiable through the blockchain);
Donald Trump seems to be a very crypto-friendly soon-to-be president;
October is a historically positive month (leading to many in the industry to refer to it as ‘Uptober’.
Thus, contributing to a drain in liquidity.
Markets are very cyclical and follow narratives. Finding a data-backed narrative you believe in and committing to it is very important. Then, look for signs to validate your bias and invest accordingly. That confidence and vision come with experience and time in the markets. So please don’t feel FOMO (fear of missing out) and jump on the shiniest, newest trend because that seems to me like the fastest way to lose money in this market.
So, have I missed out on an opportunity to make money?
Absolutely not! The cryptocurrency market is very nascent and small in the grand scheme of things. Consider gold’s market cap (price of the commodity multiplied by the amount in circulation), which sits at around 17.5 trillion USD, and compare it to Bitcoin’s market cap of 2 trillion dollars. We can say that Bitcoin still has ample room to grow (or at least I can confidently say that because I see and understand Bitcoin’s value).
If we are to follow past trends, what follows a meteoric rise in Bitcoin is known as ‘Alt Season.’
Alts (short for alternatives) are every other crypto token that isn’t Bitcoin, and they seem to grow exponentially more than Bitcoin after it starts to move.
The narrative is relatively straightforward. For Bitcoin to double its price, its market cap would also need to double, which means an extra 2 trillion USD needs to be injected into the market. So why invest in Bitcoin when you can invest in ‘smaller coins’ with smaller market caps that have the potential to grow much more?
After Bitcoin, Ethereum moves, and smaller tokens follow it.
It might be time to investigate these smaller markets and the hidden narratives, such as gaming, AI, smart contracts, and meme tokens, if that interests you! Again, I invite you to explore the categories within CoinMarketCap (https://coinmarketcap.com/cryptocurrency-category/) and do your own research. It’s better for you to be informed and in control than to follow other people’s trades.
I’m particularly interested in the gaming sector and I’m watching ImmutableX (IMX) very closely as I think it will provide the base infrastructure to every gaming project trying to build on blockchains.
Keep in mind
This market is very volatile and opportunities will present themselves to you. In fact, Bitcoin has dipped from around 105 thousand USD to around the 95 thousand USD during the time it took for me to write this post.
Stick around and invest only what you’re willing to lose, as they say it.
Hope you enjoyed this short update!
We’ll be back soon with more educational posts in 2025!