Thoughts On The Current Market And Doubling Down On Market Dips

What a slew of bad news, fear, uncertainty and doubt right now. The crypto market took a huge nose dive after news of China clamping down on Bitcoin mining in Sichuan and major Chinese banks taking a harsh stance against Bitcoin and on-ramps.

This sudden, aggressive and swift clamp down on crypto is nothing new. In fact, China has been trying to shut down Bitcoin for the longest time since 2017, 2018, 2019. So the current clamp down is really nothing new.

I shall keep this post short, as I don’t like to dwell too much on short term price actions and rather focus on long term fundamentals.

Bitcoin is decentralised for a reason

Bitcoin is not a company and has no CEO, the fact that it is leaderless (decentralised) means that it is impossible to clamp down 100%.

Bitcoin was born out of the internet, and the only way to shut Bitcoin down is if the entire internet gets shuts down. When that really happens, I guess the world is probably ending.

The future of Bitcoin is the same as before.

As more people/companies/governments/countries understand and adopt Bitcoin, fundamentals will follow. (AKA price will still go up.)

The current clamp down is just fear, noise and uncertainty. If you are a long term investor, this should be a perfect opportunity to accumulate while others are fearful.

To attain a 100-bagger, we need the vision to see them, courage to buy them, and patience to hold them.

Holding Bitcoin through turbulent times like this is a prime example for myself.

What Did Investing Beanstock Do Recently

During the current turbulent and confusing market, I did the following:

Crypto:

1. Transferred all my Bitcoins into DeFi protocol 'Autofarm' (Binance Smart Chain) to yield farm – Current APY: 10%-14% APY (Belt.Finance Tokenised BTC)

2. Bought heavily into Fantom (FTM) during the severe crash, totalling up to 5 buy-ins (at the point of writing)

3. Transferred some my Ethereum from Nexo to Hodlnaut (6% APY – 6.7% APY)

4. Remaining Ethereum and other alt-coins are in DeFi Protocols, still being yield farmed (13% APY – 115% APY)

Stocks:

1. Sold my entire Alibaba position (Cut loss) due to weak sentiments and opportunity cost reasons.

2. Rotated the capital into Roku Inc (New Position)

3. Averaged-Down on Etsy and Coinbase

As you can see above, I did not sell any of my crypto (even though portfolio is in a loss right now), but instead bought more (Fantom) and transferred my crypto assets into yield farming protocols to earn passive income from them.

The only “Sell” I made was on Alibaba. While it was a tough decision as I am bullish on Alibaba long term, it was too much of an opportunity cost to miss the averaging in on Coinbase due to irrational fear surrounding crypto.

I have come to realise that if I am already exposing myself to the most volatile asset class (aka Crypto), I might as well focus on smaller-cap growth stocks with higher room for growth than large-caps like Alibaba.

I also rotated the capital into my other E-commerce position, Etsy. Etsy at current price points is fairly valued in my view and seldom is there a scenario that Etsy is down 30% from its high. As for Roku, the growth numbers are insane and so I had to hop on the train before it goes away.

Overall, my investing strategy have not changed. I remain a “Net Buyer” of stocks and crypto as I continue to accumulate assets over the long term.

Nothing about crypto changed fundamentally despite the price action, and I urge readers to build conviction through research, due diligence and self-realisation about the utility and potential that crypto can bring about to our lives.

Crypto is still very early

Crypto is after all an extremely young asset class. With a market cap of less than 2 trillion at the point of writing, there is still so much room for growth.

For perspective, the stock market is approximately 100 trillion USD, while the market cap for gold is roughly 10 trillion USD.

Innovation takes time for mass adoption, and although we are not there yet, stepping stones are already laid in place which makes us on track towards mass adoption.

The Next 10 Years will be a Wild Ride

The next 10 years will be filled with chaos and uncertainty for sure. With central banks flooding the market with cash and liquidity, the side effects after these easing measures are removed will be detrimental to the market for sure.

Inflation will kick in, tax rates will go higher and more people might lose their livelihood.

Right now, the stock market is being propped up by the central banks, and one day when the central banks ultimately close or tighten the money printing taps, we may see capitulation the magnitude of 2008 but that remains to be seen. No one knows what will happen in the future.

The most fool-proof way is still to dollar-cost average into the market, and to remain disciplined while the market continues to be in turmoil. Emotions is the number 1 killer of returns and wealth creation, having the ability to control one’s emotion during a crash is not only rare, but once attained, will ensure that you will remain rational and solvent when volatility shoots up.

Remember, volatility is a feature, not a bug. Take advantage of volatility and use the dips as an opportunity to accumulate, if not, just dollar cost average consistently.

What I learnt

I am constantly trying to apply this concept too when I invest, and I do make mistakes as well. The current market taught me to always reserve a war chest in case of any massive dips to buy into the market constantly.

The number of people that are still skeptical about crypto and blockchain in general, is still bewildering to me. Perhaps they don’t yet understand the problem with money printing and centralisation.

Here is an article for all if you want to find out why Bitcoin is the solution to the problems central banks are causing.

Join My Tele Channel Here For Updates!

Hope everyone is doing well. Ignore the noise, think long term, and enjoy the ride. Peace.

*Disclaimer: Below are some useful articles I wrote previously and might be of interest for readers who are curious to learn more. There are affliate links involved and should you decide to sign-up, it would be a huge sign of support for my content and contribution to the community. Please do your due diligence thoroughly before diving into any form of investments!

For those who are already into Crypto

Want to learn how you can earn high yielding interest rates on your idle crypto assets in a secure, safe and easy manner?

Earn Yields on Those Crypto With These Platforms

You can read up more on my post here to learn more about Celsius and Nexo which give you interest on your crypto assets.

Or read up more on Hodlnaut here which is a Singapore-based crypto lending platform with market beating interest rates.

What is Bitcoin? Answers here

Or do your due diligence on Bitcoin in my post here where I debunk some of the myths regarding Bitcoin.

Gemini Exchange (My Favourite Crypto Exchange)

Also my crypto exchange of choice Gemini here if you are looking to buy your first crypto!

Too Many Crypto Platforms? Here’s a Crypto One-Stop Solution

If you think there are too many crypto platforms out there, here is a simple solution for you. An all-in-one app for you to earn yield, trade, invest or borrow crypto with high security and assurance. Check out my Matrixport review.

What is Decentralised Finance (DeFi)?

Or do you want to learn more about DeFi in a simple to understand manner? Click here to learn more.

How to Value Crypto Assets?

Learn more about how you can put a “fair value” on crypto such as Bitcoin, Ethereum and more here.

Crypto Referral Links (Click and Sign Up)

Gemini Exchange: Deposits and buy US$100 or more crypto on Gemini and you will earn US$10 in BTC.

Coinhako Exchange: You can create an account by clicking the link and then enter promo code: COINGECKO when doing a buy/sell and enjoy 20% trading fees discount!

Binance Exchange: Create a Binance.com account here and trade the widest range of crypto pairings!

Hodlnaut: Earn US$20 in BTC/ETH/USDT/USDC/DAI for free with your first transfer of US$1000 or more in the corresponding crypto asset of your choice!

Celsius Network: Earn US$40 in BTC for free with your first transfer of US$400 or more in any crypto asset and wait for 1 month!

Matrixport: Get a $1288 free coupon trial to try their product and earn $20 in USDC when you sign up successfully and become a qualified client!

Nexo: No referral events at the moment 😦 Just sign up and enjoy this great product!

StocksCafe

I use StocksCafe to keep track of all my investments + research on stocks. You can also view my portfolio as well as many others so you can compare your own performance with other investors. If you are interested in signing up, you can use my referral link to sign up and access premium features for 1 extra month for new users. (3 months)

The Power of Low Fees

One huge advantage I have as an investor is paying very minute fees which can really eat into returns in the long run because I am using Firstrade to buy US Stocks which has absolutely $0 fees and extremely fast wire transfers for deposits and lightning fast trade executions.

Ever since I switch to Firstrade last year as my main investment vehicle, I saved up on a ton of fees and hence able to achieve way better returns than before. I saved up more than 5 times the fee paid in 2018, 2019 and 2020 this year due to the switch and I am really happy thus far.

Of my entire investments in 2020, fees only take up 0.1% of my entire portfolio! (2018+2019+2020 combined across all brokers and Robo)

Alright that’s it! For now, think long term, tune out the noise and avoid the temptation of gambling meme stocks, think of the companies that will do well in the long run simply find bargains/dollar cost into your positions. If you need some inspiration for companies to research, you can check out my post on 5 stocks to buy if the market crashes here.

Disclaimer:

The content here is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security. In fact, the content is not directed to any investor or potential investor and may not be used to evaluate or make any investment.

Do note that this is not financial advice. If you are in doubt as to the action you should take, please consult your stock broker or financial advisor.