Sometimes on a crypto dip, I buy outright.
Sometimes I do not.
Here is why I’m not buying outright this time around. And why I’m still waiting.
Wut?
If you’re not familiar with a trailing buy, (I’m sure I didn’t invent it, but I did bring it to the masses).
It’s a really great investing technique. Learn about it here.
By utilizing this technique, if you are wrong about price not falling further, you’re still protected.
And if price does keep falling, this is great for you because you will now be getting in at even cheaper prices than before.
As we know, the crypto market can continue to fall for nonsensical reasons.
Just like it’s been doing all throughout July.
This Does Not Add Up
At the end of the day, all money does is transfer from the poor to the rich.
Whether you’re rich or not, you can still employ the same tactics rich people use, and we do this here every chance we get.
Here, and at the 10-Minute Contrarian Podcast, we utilize a long-term “HODL/DCA” strategy, where we find tokens we think have long-term staying power, then add more when price drops.
ESPECIALLY when it drops irrationally. Just like it did recently.
For those of you reading this blog in the more distant future, the price of Bitcoin has ranged between 60K and 72K for sometime now.
Price was on its way to the bottom of this range, when two pieces of news came out nearly at the same time.
- People who had their BTC stolen through Mt Gox back in 2014 were finally going to be made whole
- Germany was getting rid of all of their Bitcoin.
And the price of BTC fell below 54K for a moment. Altcoins fell much further.
As usual, sellers weren’t looking at the big picture. Or any picture for that matter.
Mt Gox
This was very good news for early Bitcoiners who got screwed.
Remember, back then there were very few places to hold your BTC, so it’s not like any of these people made a stupid or thoughtless mistake.
It appears they are all finally being made whole. Justice has prevailed.
On July 15, 2014, the price of BTC was roughly $614 USD.
It’s now approaching 100x that.
Of course, some people are going to sell at least a few Bitcoin here. I certainly would.
Pop the champagne, buy yourself something nice, maybe a dream home, and live well while still having lots of BTC to your name. Who wouldn’t?
But if those people hadn’t already figured this out, they have certainly learned by now that HODL’ing as opposed to panic dumping when things get rough, was the superior move this whole time.
And not to stereotype, but I doubt most Bitcoiners are the type of people to be broke in 2024. They can stand to HODL longer.
But regardless of what they do, there is no long-term fundamental bear case here. Very short-term in fact.
So the drop we had makes little to no sense here fundamentally.
Germany
We’ve spoken about this before on the podcast.
Germany is quite fucked.
One of, if not the most financially prudent countries in the world, has become net sellers of the best asset of our generation.
I mentioned before as well how central banks everywhere were buying up gold in 2023 and 2024, but Germany was not.
Do you think a country like Germany would pass this opportunity up on purpose?
No. But Germany is in a terrible position, and in many different ways.
They will need to deindustrialize. In fact, this process has been currently going on for years.
Blame having to shoulder the load for a failing EU, blame deglobalization, blame woke politics, blame the WEF, blame laughable energy policies, wherever you want to point the finger, you probably wouldn’t be wrong.
Long story longer, I’m sure Germany certainly did not WANT to sell their Bitcoin. They did not WANT to have to pass on purchasing gold at $2000/oz.
But they have no choice.
So this news is not bearish at all for Bitcoin. Yet the price falls.
Again, no fundamental reason for the fall.
We love this.
(As an aside, Tron’s Justin Sun offered to buy up all of Germany’s Bitcoin. I’m kind of glad he did not)
So Why Not Just Buy?
You certainly can, and IMO you would be historically correct, which is the only thing that matters long-term.
But I chose not to here.
Bitcoin dropped irrationally, we can safely arrive at this conclusion by now, but….
Altcoins dropped even further.
Remember, they did nothing to deserve this. All this is, is traders and dumb money overreacting to an irrational fundamental drop.
And altcoin holders have much weaker hands than Bitcoin holders, so it makes sense.
But this is our gain. For we are not them.
Come….to….daddy!
We employ rich-people tactics to remove people like this from their wealth.
And this is what we’re doing now, and now is a great time to do it.
Because if you didn’t know, Germany has finished selling their BTC.
The bottom could very well be in.
But I’m STILL putting in a trailing buy instead of buying outright.
What gives?
So earlier this week, I put this tweet out for the sake of transparency:
Currently, the IMX chart over the past 3 months looks like this:
And we are currently still in this bottom range.
I very firmly believe the Web3 gaming space will be massive, after a choppy ride up once it starts to take hold in the overall market.
I honestly don’t see how it cannot.
IMX is the current leader in this space, and has a very large lead.
The reason why it is falling with everything else, is nothing more than narrative. When Web3 is the narrative, everything rises tremendously.
So when it becomes the narrative again, and starts solidifying itself into the hearts and minds of mainstream gamers, you’re going to be really glad you bought the best of breed at nonsensically low prices.
And here we are, for no logical reason, 65% off the recent highs. Pinch yourself.
But I still haven’t explained the reason for the trailing buy.
Let’s look at a better example. Here’s the ETH chart from the same time frame. It paints a better picture of the altcoin market as a whole:
via CoinGecko
Chartists, what do we see?
A bear flag.
We are currently in a possible retracement.
Sentiment in retracements are typically feelings of relief and newfound optimism.
Even though Germany is done selling, even though Santiment is showing whales buying up BTC at these current prices (they were buying up BTC at 64K as well), and even though bullish narratives are back in the news…
We’ve seen all of this before.
As much as it could in fact be a “V-Shaped recovery”, It doesn’t hurt to put yourself in a position to get in at cheaper, potentially much cheaper prices, at the expense of a few ticks now.
All told, the math works out in your favor over time. Very much so.
And this is why I’m using a trailing buy for IMX, and I’m also preparing to utilize it to add on to other positions should price drop even further.
— VP