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Crypto assets are a booming thing due to the first cryptocurrency that is Bitcoin reaching an all-time high of around $60.000 per 1 coin in 2021 (smells like a bubble to me) and thus almost all crypto assets price was soaring. Referring to the web of the Australian Government (2023), crypto assets are regarded as digital assets in which the value can be transferred, stored, and even traded electronically.
Although crypto assets are regarded as digital assets, there are several personal reasons for me to not trade them actively:
24/7 Drain Psychological Conditions
In forex operation, Monday to Friday which is 5 days a week is the time when forex operates continuously. Those 5 days are good enough for me to balance my psychological conditions with 2 days a week of rest from Saturday to Sunday. I can sip a cup of coffee and eat a Double Big Mac calmly without worrying about the price movement during those 2 days of rest.
However, when it comes to crypto assets it is like there is no rest for me as the market is continuously open 7 days a week (every single day) in the crypto market. This certainly will drain my psychological conditions and cloud my mind's judgment as the fantasy starts coming in such as What if the price drops after I open a long position? and if I open a short position I fear that the price might go up but if I do not act I might miss a train.
Fast Fluctuation Price than Stock and Forex Market
The price movement of crypto assets is faster than that of the stock and forex market, I consider it a higher-risk trading instrument than stock and forex have. It can make you gain faster but also can drain your money faster. This point is connected to risk appetite and fear-greed psychology.
Even I still question myself from time to time regarding crypto assets such as is supply and demand are really the driving force behind the price movement? or is there a certain individual or group who controls the price movement?. Well, these questions sound like I am skeptical about crypto assets but because I like experimenting I still buy crypto assets as an investment (not trading actively) with a small fraction of my money.
I Still Need to Research More on Crypto Assets
Due to the fast development of crypto assets, I have no choice but to admit that I still lack a major understanding of crypto assets even though crypto is already regarded as digital assets, there are many foreign concepts I need to understand deeply (at least for me) that are written in Australia Government (2023) such as a stablecoin, cryptocurrency, investment token, game token, and non-fungible token.
It is true that I like experimenting and doing trial and error, however, I do not want to plunge so deep into something without a safety net like understanding the red thread of crypto assets first and only using a small fraction of my money to spend in the crypto market. To simplify my explanation, I use one of my favorite quotes below here:
“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” - Sun Tzu, The Art of War (GoodReads).
Applying Sun Tzu's quote means if you know forex and know yourself, you need not fear the result of a hundred trades (see my forex performance here). Applying Sun Tzu's quote in crypto assets means if you know yourself but not the crypto assets, for every profit gained you will also suffer a loss and If you know neither the crypto assets nor yourself, you will succumb in every trade.
Written by Andre I.
References
Australian Government (Australian Taxation Office). 2023. What are crypto assets?. https://www.ato.gov.au/individuals-and-families/investments-and-assets/crypto-asset-investments/what-are-crypto-assets (Accessed Nov 30, 2023)
GoodReads. Quotable Quote (Sun Tzu, The Art of War). https://www.goodreads.com/quotes/17976-if-you-know-the-enemy-and-know-yourself-you-need (Accessed Nov 30, 2023)