If you are not in crypto, you’re standing on the shores of an incredible opportunity. if you are… well… I’m so sorry. Yes, after 2 brilliant years of bull runs and gains and people screaming “TO THE MOON” and “Wen Lambo?” it has all come crashing down in the past few months. But unlike the other significant pullbacks across the last 24 months, this one looks like it has some staying power.
It is that classic duality of the non-crypto investor. As prices pump, they decide not to invest as “prices are too high” and instead decide to wait until the next inevitable crash. Then when it comes, and prices drop too much more palatable ranges, the same investors say “Crypto is too risky right now, I’ll wait until it starts going up.”
Now “risk” is subjective. It is a broad spectrum that caters to many different types of investors, both new and hardened. But regardless of your opinion on Crypto, it looks like we are in the grip of a cold and relenting winter. I could be wrong (and in fact, if my trades since the start of the year prove anything, it is that I am very, VERY wrong), but there is no denying that right now, the party that started back in 2020 is over and no one wants to hang around to clean up the mess.
So should you invest now? That’s not for me to say, only you can look at your own personal factors and decide whether to jump in or not. But for me? Now is the time to hold and accumulate.
But what can we learn from the 2018 winter, and apply it to 2022?
Small cap coins will get wiped out
Many of the speculative coins and tokens that hold the promise of 10,000% gains do not survive the winter. If it was a literal winter, the obscure alt-coins are the equivalent of straw shacks. Not very insulated. Coinopsy lists nearly 750 crypto projects that “died” in 2018 and some had been going for 5 years or more at that point.
The top two are safest
Bitcoin and Ethereum have the longevity to outlast the winter. While the small-cap coins try to forage in the frozen tundra, the big two sit in their castles, feasting on endless delights as they wait for the lands to thaw. While this doesn’t mean they won’t run out of food and starve, usually when the rays of the sun warm the lands again, something of the big two lives on.
Be conservastive with investments
It is likely that any money you put in now, will go down in value. So now is not the time to yeet your saving in just because you can pick up a whole ETH for the first time since you got into crypto. DCA small amounts that you wouldn’t miss. In the long run, when the markets pick up again, you’ll be in a good position to make gains.
Keep your eye on the top 10-20 cryptos
Projects like Dogecoin, Solana, Polkadot could go either way this year. Dogecoin, on one hand, has come through a few winters of its own, whereas Solana was founded during the crypto winter of 2018, meaning this is its first proper one where it was in a position of strength when the winter hit. While these coins may present excellent returns in the future, there is always a chance a long spell in the cold could kill them off for a number of reasons. Keep your eyes and ears peeled for news that might affect the price.
NFT’s are chaos manifest
NFT’s seem to be the term that has forced the mainstream to look at crypto, and they aren’t happy. While in the future, Non Fungible Tokens might have a place in a digital society, right now it seems like sense has separated itself from reality in a crude way to make money. Big companies like Nike, and Mastercard are dabbling in NFT’s but likely it’s only because they know there are people who will buy them for thousands of dollars. But if the NFT hype dies, there are gonna be a lot of people out there with very expensive JPEGs. Investing in NFT’s is probably the biggest gamble of 2022. But if it isn’t then someone out there who has one of the first NFT’s will be able to buy a small island in ten years. But for me, there’s too much noise around them for them to be a good investment.
Richard Mooney 