No one took it seriously at first.
It was easy to mock at $50 or even $100. But then it went to $1,000, then $4,000. Ethereum’s swift rise to 1,000 times its original value remains a mystery to me. Its founder, Vitalik Buterin, weighs less than two bags of dog food.
Every cryptocurrency has a narrative. Bitcoin is the ‘OG,’ and DOGE is a joke. But Ethereum is a platform. Experts claim that Ethereum enables building and deploying smart contracts and decentralized applications (dApps) without downtime, fraud, control, or interference from a third party.
Uh….what? I don’t think we’ll get billions of people to invest in something we can’t explain in simple terms. So here it is: Ethereum powers lending and borrowing. Ethereum is fast and secure for payments. Ethereum runs computer programs on a blockchain.
I like to make money. I’m guessing you do too.
In 2021, the US stock market gained 20%, and people went nuts. The world had economic euphoria- we were back from the pandemic.
But in the same year, Ethereum grew by 700%. A few gained life-changing money, but the rest felt resentment and fear of missing out. It’s about more than greed. FOMO is equally powerful.
“If only I had known to buy Ethereum six years ago,” you think, picturing yourself in your 82nd-floor penthouse overlooking Central Park South. But you couldn’t have.
At the end of 2016, crypto investors were equally excited about GameCredits (-92%), Factom (-81%), and Iconomi (-38%). In 2018, Ethereum suffered a 72% decline. Would you have held onto your ETH through those years, being disappointed again and again?
No one would’ve blamed you for selling. Certainly not your financial advisor. Picking the winners is a shitty business. Holding on to them through carnage is even shittier.
Unless you were on LSD, you wouldn’t drive by looking in the rearview mirror. Don’t invest based on past performance.
Bitcoin and Ethereum follow a pattern- painful crypto winters followed by fantastic gains. Each bull run generates all-time highs. The reasoning follows- the next bull run will be even more incredible than the last, right?
But you don’t know that. And you can’t predict the future, either.
What, then, should you know?
Cryptocurrency gains steam in low-interest rate environments. Few understand it. For the patient and disciplined fools, it can produce spectacular returns.
Losing money and losing confidence in your investments sucks. Are you a cryptocurrency investor? It will happen- you’ll lose faith. Your crypto portfolio will lose 40% of its value. All crypto investors must live through crypto winter and bear markets.
You’ll also miss opportunities and feel FOMO.
“Someone will always be getting richer faster than you. It’s not a tragedy- get used to it,” Charlie Munger says.
Don’t let greed, fear, and FOMO rule your decisions.
Check out the interactive crypto fear & greed index chart to see how price swings affect market sentiment.