In crypto, patience is not always a virtue

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The patient dog eats the fattest bone sounds like an African proverb.

In any case, I don’t know where it comes from, and I don’t know if it’s true. It was probably more correct a few years ago. Anyway, patience is a virtue; not always, especially in crypto.

Bag holders are a special group of people in this space, the most valuable group of investors. Everyone takes bags, at least once in a while. Holding on to an underperforming asset is a struggle between patience and hope. Or a struggle between patience and greed when the asset performs considerably well. Each time you hold back from pressing that buy or sell button, one of those gains. Well, patience is the key word.

It works, in a few cases; other times it does not. A rapidly evolving space like the one we have in crypto is one of those rare cases where hanging on turns out to be a bad decision most of the time. Gains or losses can occur at any time; unfortunately, these two events can follow one another (very) quickly. Either way, if you’re here for the technology, profit or loss may matter a bit to you. Earning a few bucks quickly doesn’t sound bad either.

The popular sermon is to hang on for dear life. Let’s face it, most of the time it doesn’t really work. The path to holding bags is easy. Expecting millions and settling for a few thousand or hundreds is a quick turn of events here. The greed index is volatile, which in turn leads to price volatility. Normal price movements are in response to human behavior. Other than that, a space as unregulated as crypto can force you to take what you can, when you can. There is hardly any insurance. The extent to which this happens largely depends on the nature of the project.

Highly speculative projects are subject to strong price fluctuations. They are also accident prone. Most of the time, these crashes are deliberate and investors have to mourn severe to mild losses. Well, patient investors. The impatient have probably already taken some or all of their profits; in this case, they win. This case is becoming more and more common. The absence of regulation in space gives way to the ephemeral speculative project. Huge pumps, ridiculous dumps. Investors are easily caught off guard by the rapid turn of events. Patience fails them here, unfortunately.

A rather smart decision is to put an end to patience and withdraw your capital when a speculative project develops in a tangible way. The rest can run. If the dump hits, your capital is preserved and some profit if you are eager enough to take profit.

It’s not financial advice anyway, just a piece of individual experiences. Maintaining relevant projects over the long term could be very rewarding. Finding these projects from the ground up, however, could be a very tedious task.

Also posted here.

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