“Diamond hands” was the mantra promoted by crypto investors during the pandemic boom, which saw Bitcoin Rocketed north of $68,000 and appears as though it will never come down.
It seems obvious now, but what is it that they say about hindsight bias? Cartoon monkeys were trading for $400,000+, billionaires were tweeting about Doggy Tokens and the most powerful emotion known to mankind, FOMO, was raging long into the night.
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market meltdown in 2022
And then it all came crashing down. a stablecoin that proved anything but steady cornered the market in May, triggering a contagion crisis of epic proportions. Dominoes came down, and prices came down.
But Peter Thiel, one of the most high-profile bitcoin backers, apparently remains unmoved. Founder Fund, the venture capital firm he co-founded, nearly shut down crypto Status after 8 years long investment. According to reports, Founders Fund currently does not have any significant exposure to crypto.
Since first investing in 2014, BET has generated a return of $1.8 billion. Nearly two-thirds of its total investments piled up in bitcoin, which opened 2014 at around $750 and closed the year above $300.
This is great reading – I’ve marked in black on the chart below where Thiel allegedly outed. this was two months ago luna The death spiral led to a decline in the crypto market.
There’s a Lesson Here for Crypto Investors
Thiel attended the Bitcoin Miami conference in April 2022, shortly after the massive selloff. He spoke highly of bitcoin, saying that “the end of the fiat money regime” was near and that bitcoin could trade closer to $4.5 million per coin.
Her actions said otherwise, and her bank balance would be grateful as a result. It’s a story that rarely happens in crypto, given the culture built up during the bull run around “Diamond Hands” and the need to go all in.
I’m a bitcoin believer, but that doesn’t mean I don’t think it’s insane to go all out on this asset. This is right at the bottom of a bear market or the top of a bull run. Bitcoin is an incredibly volatile asset and failure to diversify appropriately will end in financial ruin.
There is a way to invest responsibly and still have confidence that bitcoin – or any other asset in the world, for that matter – will excel. It is unwise to follow the advice of Michael Saylor, who said below when bitcoin was trading at $56,000.
Take all your money and buy bitcoin. Then take all your time to figure out how to borrow more money to buy more bitcoin. Then spend all your time figuring out what you can sell to buy bitcoin
Michael Saylor
Be more like Thiel than Saylor.
The Founders Fund’s crypto sale was one of ten big moves made between 2020 and the end of last year, returning more than $13 billion to investors. It is clear that this was part of a wider strategy.
While no one can time the market and hindsight bias is making this seem like a genius move, there is a lesson here. It is very likely that Thiel still personally believes in bitcoin and holds a portion of his own. Who knows? But that doesn’t mean he wanted to stake his firm’s future on it. I wonder if Michael Saylor and the MicroStrategy executives have seen this news.
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