Cryptocurrencies – Be Careful of Bubbles (May 26, 2017)

Contrary to popular belief, when it comes to investing it is entirely possible to be simultaneously BOTH a bull and a bear… As I wrote about in the last few posts, I’m quite bullish on cryptocurrencies over the long-term but bearish over the short-term (due to the hyperbolic rise in the last month or so).

Everyone knows that latecomer retail investors usually get slaughtered near the top, so why would anyone expect anything different with cryptocurrencies?

Yes, yes, yes, we’ve all heard the arguments for these digital coins ad nauseum — They are the wave of the future and will revolutionize the planet much in the way the internet did back in the 1990s…

Big deal…

Bubbles are still bubbles and when you have irrational exuberance, the trend will of course reverse sooner or later.


It’s NOT different this time!

Never lose sight of that and fall in love with your investments… What’s the point? If you’re long-term bullish, then take a chill pill and wait for the tide to turn and try and get in at a much more favorable entry point than say at a 52 week/all-time high. If you’re already well situated, why not take some profits off the table and de-risk yourself as much as possible?

As I’m writing this, the entire cryptocurrency space is taking a much needed break after an epic rise, and is FINALLY correcting.

But with like anything that has run way too far, too fast, this most recent pullback is rather substantial!

From Coin Market Cap.

And this is precisely why it’s a good idea to proceed with caution!

When everyone you know: friends, family, neighbors, co-workers, the entirety of social media is up in arms over why you MUST BUY NOW, alarm bells should be going off alerting you to run for the hills…


For newcomers rushing into the space, irregardless of price, you can’t tell me those type of declines shown above don’t hurt!


Price matters… ALWAYS!


Price is what you pay, value is what you get.


I’m watching the space carefully for a good entry point to get some exposure (for diversification sake since I already own a ton of gold/silver/fiat)… But quite honestly, I’m seeing far more value and opportunity in precious metals mining stocks right now, which I’ll get back to talking about shortly…


Since cryptos have been all the rage as of late, though, I thought I would cap it off with this latest post…


Anyway, long-term I believe that Bitcoin and Ethereum have lots of potential and legs to run a lot further… But this pullback is healthy and much needed…


It is possible (and sometimes very reasonable) to be both bullish and bearish at the same time… There you go.


Fancy that.


Happy Hunting!

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3 years ago

Thanks Jay! Totally agree with you and I believe we’ll see some crypto speculators with full pockets back on the mining sector. Happy Days will come to us again!