Here let me write something down. This is important. The most important value
proposition of cryptocurrency is decentralized, secure, digital scarcity. It took me at
least a couple of years of daily research and stupid investments to mature into this
realization. But once I got there, I saw very clearly that Bitcoin is
the only cryptocurrency that makes sense to hold long term, because ald coins aren't
decentralized, secure, or scarce. At the end of this piece, I'll
suggest some books that really changed my understanding of the banking system and money economics,
bitcoin, decentralization, and what it means to be self sovereign. But
here I am in this not so fun position with a bag of alt coins
that I bought when I was new in this space. Let me know if
you recognize yourself here. This is how I reasoned. I wanted to have
exposure to crypto, and so I did my due diligence on different all coins
or so a thought, and started buying, thinking I did myself a favor
by diversifying. At the time, I new too little to realize my mistake.
If you want exposure to the world's stock markets, you buy a cheap
global fund with stocks from different regions and different sectors. You don't buy penny
stocks from startups in Venezuela. And if the most important value proposition of crotocurrency
is decentralized, the digital scarcity, you don't buy decentralized hypecoin of the month.
If you've made bad investments or if you're not enjoying this beer market,
this is for you. In every beer market, Bitcoin regains market dominance over
all coins because all coins are more volatile than Bitcoin. In both beer and
bull markets, whatever Bitcoin does, all coins do, but times ten.
In a beer market, Bitcoin will go down obviously, but also will go
down even more, and so Bitcoin regains the market dominance in beer markets.
Similarly, in bull markets, also go up more than bitco point does percentage
wise, and so Bitcoin loses a bit of market dominance in bull markets.
In these market cycles, there are always some old coins that disappear, and
there are always some newcomers. Now I'm sitting on a bag of ethers,
and here's my plan. Let me go to trading you and look at et
BTC. At the peak of the last bull run in December twenty seventeen and
January twenty eighteen, one ETG cost one thousand, four hundred dollars. This
was also when EH had its higher share of market dominance, and one ETG
cost zero point fifteen BTC. Currently, in this bear market, at twenty
eighteen, one et costs zero point zero three BTC. We see here that
ETH behaves like every old coin. Ald coins do whatever BTC does, but
with a little bit of lag and more volatility. So my plan is this,
if we see another bull run and ETH increases with respect to BTC,
I will sell my ETG for BTC at the previous all time high, so
when one EH sells for zero point fifteen b twoc. If EH never reaches
that market dominance again but still increases in dollar price, I'll start to exit
with cell orders starting at around one thousand dollars per Ether and just take to
dollars. If neither scenario happens, I'll hoddle, perhaps see EH go to
zero or stabilize at something ridiculously low, and take it as a lesson.
I never lose, I learn. So if EH goes to its previous all
time high in terms of dollar price or bitcoin price, I will first and
foremost exit for BTC and second for dollars, But could it go higher than
zero point fifteen btc per ETH. Here's the most important thing. Nobody knows.
There are educated guesses, obviously, but I'm personally very very careful with
whom I listen to. I think it could happen. I think EH could
surpass a zero point fifteen btc per ETH, but I think it depends on
the hype rather than anything else, and hype may or may not come depending
on what Ethereum does in the following years. For example, how are investors
going to see the switch from proof of work to proof of stake? What
it comes down to for all coins is mostly hype. Furthermore, it doesn't
really make sense as I see it, to hold EH for its monetary value.
Ethereum is a platform for building and publishing decentralized applications that run smart contracts.
Et is not designed to be used as money. EH is converted into
something called gas that is used to run smart contracts on the Ethereum platform.
If Ethereum didn't have the ETH token, you could code an app that runs
an infinite loop and brings down the network. So ETH is basically a spam
filter. It was never intended to be money, but the market doesn't care.
If the market decides to use EH as money, then it will.
But ET is centralized and unsound money. The most important value proposition of cryptocurrency
is again decentralized digital scarcity. Bitcoin is decentralized sound money. EH is centralized
and unsound not money. Eventually, the general public always senses the difference between
sound and unsound money, and sound money always wins. This is very much
the reason why Bitcoin will outlive both all coins and the dollar. And here
are some books I couldn't recommend more that also happened to be some of my
favorite books of all time. The Bitcoin Standard by saved In Amus Master and
Bitcoin, The Internet of Money Part one and two by Andreas Antonopolis. The
Sovereign Individual by James Dave Davidson and Lord William Rees Moggie. What has the
Government Done to Our Money? By Murray and Rothbard, And The Ethics of
Money Production by Jergigid Hulisman. Good Luck, happy reading, happy trading talk.
Soon will do know of what he'll do with