Diamond hands doesn’t equal free money. A broad look at crypto coins.
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This is just a response to a post I saw trending. Thought I'd just share some data from the previous market cycle top to hopefully slap some pragmatism into anyone who thinks all crypto only goes up over time. The base thesis of this post is that more often than in stocks, crypto has definitive "losers". Holding crypto even long term is not a guaranteed win. These are the costs of high potential returns in a growing market. Ok. So let's take a look at the top15 cryptos from January 7, 2018. Near the ATH from the previous cycle. Anyone who was in this sub back then probably remembers some of these coins. We had the same posts back then on this sub too. "What's an alt coin I should be holding?", "What's the next big thing?", "blahblahXcoin is the next gen of crypto and BTC/ETH are outdated". I know I had a few stinky bags of shit from that cycle that I'm glad I'm rid of. So let's list where these coins are now price-wise along with some more detailed percentage comparisons: The last column is a rough percentage difference between Jan 2018 and the highest price point each coin reached in the current market cycle. I thought it'd be useful to see considering the current prices might skew these percentages and paint a negative light on some coins' recovery. So the final column will reflect the difference if you bought at the top last cycle and sold at the current top of this cycle. The outcome of a perfect situation more or less.
Ok, that's a lot of numbers. This is intended to just be a broad discussion of: – what were the big coins last cycle? – did they ever recover? – would you be net positive now if you bought at the top then? Interestingly, 8/15 of these coins did recover somewhat between the previous market cycle top and the current market cycle top! Unfortunately, with the current prices, that number drops down to only 3. BTC, ETH, and ADA. to summarize: 50% of the top15 coins recovered at some point during the current market cycle. 20% of the top15 coins recovered well enough where a bear market/correction didn't immediately put you back in the red after 4 years of holding. Now to address some caveats because I know people will interject with them. "that's why you DCA" Yea, DCA'ing can bring your cost basis down during a bear market. But if you're DCA'ing into an asset that is still currently down 80-90% from it's ATH 4+ years ago, it's a loss any way you look at it. Even if you brought your cost basis to a place where you're net positive after 4 years, your money was probably better off allocated to a broad market ETF like SPY which grew 64% since Jan 2018. "this is looking at entering at the worst time. Entry points vary and some of these positions could still be winning" very true. If you bought some of the worst coins on this list at their absolute lowest in the bear market, you might be up 50-100%. Some are more or less break even from their 2019 bear market prices. If you're break even after 3 years, that's still a loss. This argument is cherry picking data just as much as this post is. But the point of my post isn't to say you can't make money. You can make money on any coin if you sold higher than you bought. This is more of a discussion about how coins do not all inherently increase in value over time. Holding doesn't mean you'll always come out on the other end with more money. "this is just data from 1 cycle. If you got in earlier, these coins are still in the black" Ok. Yea if I bought all of these coins the minute they were created sure. There's actually a fair number of coins on this list that actually are at a price point lower than when first released, but let's talk about buying in early. Like REALLY early. here's a list of the top15 coins from 2013 Some of these coins if you bought them then, would be in the black BIGLY. LTC? Even now after the 70% drop from its ATH would be up over 400%! Sweet. What about the rest? Wtf even are these coins? If I bought and held them for 9 years do I win? 2013 Crypto rankings go ahead and click the link. Then click into any of those coins and see where they're at now. Look at their all time price charts. These are 90% fat L's. And lastly: "previous market cycles had coins in crypto's infancy. A lot of them had no practical use cases! They didn't have institutional investors! The market is way more mature now!" Most of these can by summarized into "that's then, those coins are shit, this is now, these coins aren't shit". Tech and concepts might be better now that's true. Time is the only real way of knowing which coins become of real value. All I can say is that during the last market cycle, people on this sub were speaking with equal conviction about why their given crypto projects would be offering game changing value as this sub is talking about the current batch of coins. Maybe this time we're right. But there's honestly no way to know for sure. TLDR: Holding doesn't guarantee profit or even recovery. Not all coins go up over time. This isn't a post to say "you can't make money on X coin". You can make money on any coin with lucky timing. I'm bullish on crypto. And I do hold a number of alt coins from this cycle just like i did last cycle. But I just wanted to say that nobody here should be buying altcoins with the assumption that they'll recover what they put in if they just hold long enough. You CAN Lose. Try your best to keep that in mind when investing. Assume there are parts of your portfolio that will be complete bombs and reassess what coins you want to keep in your holdings every once in a while. submitted by /u/ismashugood |
