The Same Basic Logic Applies to Crypto Today That Did Back in 2014 – 2015

In June 2015, when we started this site, one Bitcoin was worth about $225 USD. By comparison the next most valued cryptocurrency at the time, Litecoin, had a value of about $1.50. In that time I offered words of caution.

Meaning, I wrote things like,

“As a rule of thumb, don’t acquire any volatile assets you can’t afford to lose. This is a valuable guideline for investments in general. It’s important to look at the history of the value of Bitcoin. In late 2013 and early 2014, Bitcoin gained considerable Media attention, and the price of all coins inflated wildly and unreasonably. Since then most coins have leveled out at about double their pre-2014 value, but there is still plenty of room for the price to go down. History has shown us that there is plenty of room to go up as well. $1,000 Bitcoins? It happened once; it could happen again.”

Does that narrative look familiar? Media attention -> Wild spike in price -> Scary lows that merit a reminder to be cautious.

The idea of the site today isn’t to focus on price or trading advice, and it wasn’t to focus on price or trading advice at the time, it was to focus on helping people to understand cryptocurrency in all respects.

Of course, once you understand crypto you tend to catch the bug. And once you catch the bug you’ll likely want crypto. Thus, you are likely to get into mining, or trading, or using crypto, or investing in crypto, or learning to develop, etc.

Once you start down that road it means you’ll have some portion of your net worth in digital currencies.

And once you get to that point, you really have to understand that, “As a rule of thumb, don’t acquire any volatile assets you can’t afford to lose” (this is a good reminder, because many of us tend to break this rule slowly over time).

When we look back on my conservative warnings of not putting too much dollar value into BTC at $225 and LTC at $1.50 it sounds funny, it reads a bit like those old Tweets from 2011 where people are “glad they sold at $8.”

Thing is, as funny as this can all look in retrospect when we are in a boom phase, the advice seems a lot more sober and level headed when we are in the midst of a 2014 – 2015 or a 2018 like bear trend.

The reality is here in the moment the ire of the SEC, the ire of the Bitcoin Cash forks, the ire of the hangover of the 2017 bull run, and the general volatility and uncertainty of digital assets are all tag teaming the crypto markets… and the skeptics, politicians, and media are more than happy to take turns kicking us while we are down (2015 was like this too, but especially my pre-site research and experience, tells me 2014 was like this, and so were the bear end of past crypto bubbles before that).

Today we find ourselves in an environment where the tech, adoption, and use case of crypto is more exciting than ever, but where the risks seem very real.

Will we look back on $3k BTC and $20 LTC and laugh in the future, or will we cry? Well, I hope we laugh, but there is no way to know.

Since we can’t know, and since the world of digital assets is still enticing, it is important for old timers, newcomers, and the in between alike to be smart about this.

My best advice in that respect is still the same advice I offered on day 1 of the site… So I’ll just reiterate it now by copying and pasting things I wrote in 2015 with a few slight tweaks:

1. Lots of advocates of Cryptocurrency will tell you that it is the best financial system ever invented and that it has no faults. On the other hand, some people will point to examples such as the illegal deep-web market Silk Road to try and convince you that it is just a tool for crime. Techies love it – the SEC hates it [ICOs] – lawmakers are confused by it… but you’ll need to form your own opinion.
2. As a rule of thumb, don’t acquire any volatile assets you can’t afford to lose… Bitcoin gained considerable Media attention, and the price of all coins inflated wildly and unreasonably…. there is still plenty of room for the price to go down. History has shown us that there is plenty of room to go up as well. $20,000 Bitcoins [previously said $1,000]? It happened once; it could happen again.
3. In other words, although the future is uncertain, cryptocurrency seems to be more than just a fad. Here in 2018 cryptocurrency is shaping up to be a growing market that (despite its pros and cons) is likely here for the long haul.
4. On this site, we explore every aspect of cryptocurrency. Simply choose a page from the menu, visit our “what is cryptocurrency” page for a more detailed explanation of cryptocurrency, or jump right in to the “how cryptocurrency works” section to start learning about transactions, mining, and public ledgers [and blockchains, and smart contracts, and exchanges, and TA, etc].

TIP: History doesn’t have to repeat, this time it could be different. This time we could never see new highs. This time the government could actually kill crypto. The warning isn’t meant to be funny. It is really meant to be a reminder that crypto is volatile. Full stop, really really.