Strong Hands - The Daily Gwei #379

What doesn't liquidate you only makes you stronger.

The crypto markets sold off a bit over the last 24 hours and crypto twitter was, as usual, full of shared cope. One of my favorite things to do in times like this is to make silly tweets about the sell-off to paint it as actually being bullish instead of bearish. Of course, there is an element of truth to my tweet below (every DEX sale burns some ETH) but it’s also a meme to help people cope.

What I always find funny about these little sell-offs is just how quickly the mood/sentiment of the market can change for pretty much no reason. I mean, at time of writing, the price of ETH is the same as it was just 2 weeks ago - and ETH was at $2800 at the start of October. If we go back even further to July, ETH was sitting at under $2000 for a little while and we all had ample opportunity to buy at that price. Though for most people it is very hard to actually pull the trigger when there’s “blood in the streets” because no one wants to feel like they are catching a falling knife. On the other hand, when the price is going up, the “fomo” will kick in and people will buy at all time highs because they don’t want to miss the train to riches.

Those of you reading this who were around during the 2018 and 2019 bear market will know exactly what I’m talking about here. Buying during 2018 was very scary because the price just kept falling and didn’t stop until December where ETH bottomed out at around $80 (after being $1440 just 11 months earlier). Though even after that, ETH didn’t actually do anything substantial until mid-2020 which meant every pump before that was basically giving false hope to investors. I remember the worst one being when everyone was getting very excited that ETH was almost back to $300 in February of 2020 and then by March 13th ETH was at $90 due to the world-wide COVID-19 sell-off. Funny enough - buying ETH during March between $90 and $140 was the absolute best time to buy because just 10 months later ETH put in a new all time high and then a few months after that ETH went to $4400 - leading to a ~40x gain in ~16 months.

I am a firm believer that you can’t actually teach investment/trading related skills - they have to be learned through experience. This is because investing involves a lot of emotions and it can vary dramatically from person to person. For example, I am a very patient long-term investor who really isn’t phased by these dips but I didn’t start out this way at all. Back in 2013 I was gambling away my BTC on literal scams, falling for every pump and dump, and over-trading like you wouldn’t believe. I ended up selling what BTC I had left in 2014 and didn’t come back to crypto until early 2017 when I bought ETH for the first time. Of course, this time around, I had my experiences from 2013/14 to lean on so I did the exact opposite of what I had done back then and have continued doing the same thing to this very day. Again, this type of lesson can only be learned through experience for most people - it simply cannot be taught and I think it perfectly illustrates the difference between knowledge and wisdom.

Anyway, unless you’re a trader, I find the best way to play the crypto markets is to be a long-term investor with a strong research-based thesis on each of your investments. If you just chase every new narrative of the week, you’re sure to whittle away your stack eventually and I personally know how painful that can be. So sit back, relax, play long-term games, and enjoy the crypto revolution.

Oh and don’t blow yourself up with leverage in the process!

Have a great day everyone,
Anthony Sassano

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All information presented above is for educational purposes only and should not be taken as investment advice.