Friday Market Musings

How are our thoughts influenced by the media?

What do we think of the following? "Mainstream media is trying to bring down the popularity of crypto". I'm just calling out the first thing that comes to mind when I look for the December 2022 crypto news today.

The headline of the article screams at me in big letters that only 8% of Americans view crypto positively. When I read out of curiosity how this figure was arrived at, I see that a study has been done in which 800 Americans have been questioned about crypto. And then I wonder if you can even come to a conclusion from such a small group.

I mean, America has over 332 million inhabitants. Then you go and poll 800 people of that and from such a small percentage of the population can you say that only 8% of Americans are positive about crypto? That seems like a very premature conclusion to me, but it could just be me.

Either way, it's very suggestive in my eyes, but that could just be me. Although this bear market is of course not that much to be really positive about. This will certainly come into play for the many people who have never bothered to really learn about crypto. Rushed to throw their hard-earned money into Bitcoin or another cryptocurrency when it seemed there would be no end to the rise. Let's say that a large part of those negatives invested when Bitcoin hit 65K Usd. And that they thought they had now found THE way to get rich quick. Unfortunately, after a bull market there is always a bear market ... and they are now feeling the consequences of that. Perhaps they have also sold their purchased crypto in one of the major panic sales, well ... then you can rightly say that you have a negative view of crypto.

Learn before you earn

But hopefully that's a lesson. You can certainly make money with crypto, you just have to console yourself to learn about how it works, explore the cycles and the market before you get in. Yes, the well-known DYOR is often appropriate for people who are negative about crypto. One views it negatively because he lost a lot of money, almost always a case of little or no preliminary investigation, and the other views it negatively because they only believe the mainstream media reports. And that mainstream media, it is usually at the front with Bitcoin and other crypto news if it is negative enough. And you can also conclude from that, these people should do some more research.

Anyway, as you can understand, my thoughts went over 1000 times before I came to the conclusion that I personally can do little or nothing to change that. And something that I personally can't change, so I don't worry too much about that anymore.

Are we close to, or at the bottom?

The same also applies to the bear market we are in. I don't worry too much about that anymore. That too is what it is, and I personally cannot change that either. It will change again on its own. When? No one who knows. The fact is that the bear market now lasts as long as the 2014 / 2015 and 2018 ones. And that could mean that we are now close to, or at the bottom. It could be time wise, but not quite percentage wise, as this bear market hasn't been as deep as 2018's.

And the fact that we are threatening to go into a global recession, and the high inflation rates that are happening all over the world, those are just a few things to consider. Facts that certainly make it very difficult to predict what Bitcoin, and crypto in general, will do. The negatives, of course, say that crypto will not survive that, and the positives, of course, say that this is precisely THE situation where crypto can flourish like never before.

Media can't make their mind up!

We'll have to wait and see what happens. What makes it funny to read the Bitcoin articles is that the next headline screams at me "Bitcoin miners under pressure, price of $10,000 Bitcoin on the way". And the subsequent headline screams at me "$350,000 Bitcoin Price Predicted".

As you can understand, it is also important to form your own opinion between all the media violence when reading these news items. If you allow yourself to be influenced quickly, you can run into big problems. You sell in a panic because oh dear, the price goes to $10K, save what can be saved. The next thing that happens is that the price rises instead of falling. Not fun!

But also buying because you believe that Bitcoin will be worth $350K in the future can be tricky! If you haven't read that this will not happen immediately, and that it is still very uncertain whether this will ever happen at all. The prediction was made by Dave The Wave based on his own designed Logarithmic growth curve model.

Then the question is how well Dave The Wave's Logarithmic Growth Curve Model can relate to the reality we find ourselves in and that of the future. Dave can have a lot of confidence in his model. Plan B also had that in the Stock-To-Flow Chart, which was also based on a lot. But that model has also been unable to hold up against the brutal reality.

I found a solution that works for me!

So what's my solution then? Live day by day and take it moment by moment. Never invest with money you can't afford to lose, and invest for the long term if you can. That gives you the opportunity to keep an eye on the movement of the market and to buy and sell at the right times.