A Fool to Lose

in LeoFinance8 days ago

Are you up, or down?

The other day, some fool (I mean this emphatically) was trying to "bring the pain" by commenting about my losses on HIVE from the All Time Highs about 6 months ago, where if you remember it touched close to 3 dollars equivalent.

Because you know... "It's better on Blurt"


Essentially, this is the approach many no-coiners take of, "How's your crypto doing" when they see the price tank by 20, 40, 70%.


The problem is, that while they are looking at the daily, weekly or monthly numbers, their resolution is too granular - they haven't zoomed out.

The HIVE chart to date:


That red area is when HIVE was trading at around 11 cents. So, when did you buy?

This obviously matters, because while a fool will see the loss from the highs, loss is tied to the spend amount, not the peak value. If 100 dollars is spent, it peaks at a value of 1000 dollars and then loses 50% - the loss isn't 500 dollars, the gain is 400, a 5x increase.

Look at LUNA - it is currently down 99.97% and 3 hours from the low - some people are up 8000% on it, as the low was 0.00000112 and the subsequent "high" was 0.00008800 - a 78x gain.

Resolution matters, doesn't it? While some people are claiming they lost their houses after it crashed from $70 all the way down to what they consider zero, others who put in a couple grand, earned a house worth of value.

Risky for sure, especially since Binance delisted it. But, this is crypto and there are plenty of people willing to take that risk as even though they are "down" from the highs, they are well and truly up from where they bought and they understand - they aren't in a loss position and see these dips as an opportunity.

Because so many people look at the highs as their "real value" of the token as if it is the new normal, they hold because they don't want to "lose" - but this is nonsensical, because the high isn't the new floor and their "loss" is actually a gain. Many fools don't understand this, mostly because they look at narrow slices of trading time, not the bigger picture.

For example on HIVE, the other "spend" is in time creating, which is a technical resource cost, but for me at least, the cost comes at not spending that same time watching TV, scrolling Twitter or Instagram or consuming sports. For some, that is a price they don't want to pay, for me, it is a price I am willing to pay - spending my time on Hive is far more rewarding than the time I spend consuming entertainment and I don't just mean because I get "paid" for it. On Hive, I get to create and for me, that is highly valuable in a world where we are encouraged to consume instead.

The factors embedded into trading and the impact human nature has on decision making and belief systems are fascinating to me, and I like observing and interacting with all the types of people who have belief systems based on what they think is correct information. Fools think they are right and more often than not, they are also the ones who like to "inflict pain" on others they believe to be wrong. Reality doesn't come into it.

But, break down the numbers and how many people in crypto are actually in a loss position? I am not talking about the value down from the highs, I am talking about the value down from the spend?

The value of a token or market cap is not a real representation of the money spent on that token, because there is only a fraction of the token liquid at any point in time and there are people who are holding large amounts that they got cheaply or for free. This means the value of a token can pump to the sun, but once one of those whales chooses to dump, it cost averages across the fraction of liquid tokens that were actually paid for and, smashes them down.

For example, there are 100 tokens and a whale owns 90, with the other 10 liquid. 10 people paid an average of 10 dollars for the 10 tokens available, so the market cap is 1000. The whale sells and because they got theirs for free in this scenario, they can sell for anything and be up. But, people are willing to demand at lower than 10, so they dump on the market and some buy at 9, some 7, some 5. The whale can get an average of say 7 for all tokens, the new market cap is down about 30% - but there is a big difference in liquidity, since for now, most of the tokens are on the markets, but there is another difference also, people are in a loss position.

The original 10 liquid token holders who paid an average of $10 for them (100 dollars in total) and are down 30% But, if we say that 90 more people bought the whale dump at the average of 7, now there are 100 holders, with 90 at even, 10 at a 30% loss for a total market cap of 700 dollars.

This is the new "floor" as the 10 in loss don't want to sell and the 90 who bought are not likely to sell at a loss, so they will hold, hoping that demand will arrive so they can sell for a profit. But more importantly, there are now 100 owners of the token distribution and no whale to dump, which means that there will be far more stability in the price, even under duress, as not all will "have" to sell at a loss or a profit.

However, if the token gets the hype train on it and experiences high demand and pushes the price to 10, 90% of holders are able to sell at a 40% profit, whilst the 10 original buyers of the 10 tokens are at a break even point. They might sell out of fear to reclaim funds or hold, wanting profit. Some of the 90 will sell at 8 or 9, some will hold out for 15, but what essentially happens is that more people will be buying the distribution at a higher price, widening the support base and increasing the floor.

Now, the "floor" is a theoretical or statistical floor based on human behavior, as the real floor is always zero. But, if we assume that people don't want to sell at a loss and will hold when down in hope; as the price drops, more people will enter into a loss position and gather their tokens, taking liquidity off the market, which increases scarcity and at some point, demand increases enough to reverse the direction.

But what is good to note here, is that while the whale sold their free stack for an average of 7, they might never be able to buy that amount of token again, as to do so, puts the price out of their reach. It is like "Pizza Guy" wanting to buy another 10,000 Bitcoin to replenish his stock - it isn't going to happen. While this whale scarcity limits the downward drops, over time it also decreases the upward volatility also, because there are more decisionmakers in the economy with a wider range of market expectations and a lower amount of tokens. Someone dumping 100,000 Bitcoin will make a dent, but how many have that amount in their wallet? Someone with 100 Bitcoin is a millionaire, but dumping 3 million worth does nothing to the market.

This means that in order to push the price up to the highs that some are expecting, it doesn't actually take as much input as what will show in the market cap, because most of the distribution is not for sale. They are pushing up a fraction of it only, but, it also means that when the price gets high enough and some of that illiquid token hits the market from the larger players, it will drop the price at a greater rate, because the volume of token outstrips the demand for it. This is obvious.

However, read the news and they will focus on the crypto markets losing 1.2 trillion in the last month or whatever, as if that money actually existed - it didn't - it was theoretical. The amount it took to get it up there wasn't 1.2 trillion, the amount it took to drive it down, wasn't 1.2 trillion exiting. They are fools and the fools that follow them believe the Hype and FUD.

But, not everyone is a fool and while a lot of people would say "should have sold", if it is a token that has an increasing floor price over time, cost averaging so that the buy average is always below the support, means unless there is cataclysmic event, it is always in profit. Or, like the markets at the moment, it could drop below the support, but as long as it survives and a person doesn't sell, it will rebound above again and the profit is there. Holding isn't stupid, but buying the top and selling the bottom is.

Now, am I in a loss position?

Definitely not!! I am well up on what I have bought in fiat, and I consider that I am also up on my time put in, because I have been putting in time and effort for a very long time. This means that I was earning when the price was 6 cents and other people said, it wasn't worth their time. Well, from there, my time has gone 800% on today's prices, making the time in the past, more valuable than it was at the time I did the work. This is the same as buying HIVE on an exchange, just using sweat instead of fiat.

How about you?

If you add up everything you have put into crypto, minus what you have taken out and then subtract that from your total holdings, are you in the red, or the black? Have you lost, or gained?

For example, you put 100 dollars in, took 20 dollars out and your total holdings are currently worth 200, you have an 80 dollar spend and have increased your value 250% - Not bad. It doesn't matter if somewhere in between when you bought and today, the total value spiked to 1000 dollars and you were up 1250%, as that is theoretical unless realized and in all likelihood, you would never have sold the true top anyway, so why use that as the baseline.

Fools will be fools.

This is not some kind of mental gymnastics to fool myself into feeling better about "losing" profits, it is just the way things work. Understanding this and then reframing expectations and reactions to the ups and downs, will bring clarity and calmness in the face of volatility. It is all about resolution and while fools might feel confident on what they see, it doesn't mean they have insight into what they don't.

We are all foolish at times.
But, that doesn't make us all fools.

[ Gen1: Hive ]

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I've been away and will still most likely be gone for some time. Checking in from time to time though when I have a safe and solid connection.

Was shocked to see that specific fool you speak of still being incredibly foolish, this many weeks later. Been on the internet forever and seen a lot of toxic/psycho personalities but that dude makes those crazies appear decent. It's a bit alarming though. Hopefully it doesn't escalate to violence. Those crazies seem to follow the same patterns and that's usually where it leads if left alone. It's too bad he doesn't have actual friends or family to step in to help, and got himself mixed up in that Blurt cult. Maybe in his mind he sees you suffering so therefore finds joy in that (easy to detect the NPD in that one), but I personally don't enjoy seeing people actually suffering, like he is, while others take advantage of him for their own personal gain.

I like to give folks the benefit of the doubt. Maybe it's just a head injury. Slipped on a rock taking a selfie and woke up fucked. Who knows...

Looking deeper I see he's harassing folks over on the Hive Fest post and due to recent behavior, it sounds threatening. Anyone planning on attending should pay close attention to that; be on their guard. Event coordinators should look into security as well. Dude looks like a pushover but his behavior makes me think he'd go there with plans of hurting someone.

Ugh. It's too bad this community has to put up with that harassment, nonstop. But at least now people can see a good reason as to why something like downvotes need to exist. Bars have bouncers/security for a damn good reason. One psycho can ruin a business in one weekend so rather than watching all the customers leave, you kick out the one psycho. Common sense. Universal rule. Go against it; get fucked. I know I personally see no need in paying psychos like that and don't see how paying a psycho like that would bring property values up. So whatever. If people want to complain about that shit, just point at him and say, "That's why."

welcome back! (for now!)

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sup Jin.

Blink and you'll miss it.

how can i miss that which is unmissable?


By dismissing all things not missing.

Good to have you backish again.

Haven't been following his comments, other than downvoting from time to time. He is obviously struggling mentally considering the way he talks of people and I suspect that there are some deep-seeded issues in there. NPD at least - which seems to be a common thread with this type of user.

It is sad that there is this continual threat to the community, with such disturbed individuals, but it is one of the protections afforded the system - free speech and response.

The community here sets the dress code of who gets paid and plays the bouncer.

Maybe he's a drinker and can't really handle it, turns into a mean drunk, then shows up here thinking he's being funny but says insane shit instead and embarrasses himself yet too drunk to remember and learn valuable life lessons along the way like, "Don't be psycho."

Meanwhile his enablers can see the problem but act like friendlies, feeding him more booze, because that's their entertainment.

Of course, as a proponent of free speech myself, I think it's great. But why use that freedom to speak lies and insults when all that does is place the speaker within their own mental prison cell to spend an eternity held back by their own secrets? There's no freedom in living a lie.

With the amount of time he has put into some of this insanity, he must keep drinking along the way, egged on by Dutch courage and a credit card.

It is a funny thing about free speech - people like to exercise it, without much thought into what they are saying or how they say it. That is part of the freedom of course - free to be and look a fool.

I'll have to figure out the troll and what's been going on lol thankfully I haven't been abreast of that, though I'm not in the know on many of these things until I find out from a post like this hahaha.

I think it's great that things are able to fluctuate, honestly. It's a little difficult at some times but if everything just goes upward constantly then it makes it very difficult to change hands with things and increase holdings. People have been selling everything like crazy trying to recoup some funds. I've been buying just the same and taking advantage of the people with paper hands! I'm sad that I didn't snag some bitcoin at 28k but I'm wondering if we will go lower than that so I'm not too worried. Just stacking that bitcoin in the eventual goal of mine getting to a specific point then I'll be satisfied. The dips like this have been great in that regard!

For Hive I've actually really enjoyed these recent drops! I wish I was bringing in more HBD for my posts but I've been selling all my HBD so that I can buy Hive at the discount! Getting 2 Hive per HBD right now is awesome, where before we were getting less than 1. All give and take for sure but one I am certainly enjoying, a great way to build my stake.

People will always cry and complain that they "missed the days where Hive was cheap because I wasn't around" or some other iteration of shit where they claim to not be in a good position to take advantage of it. Those same people are the ones that aren't around when Hive is at it's lower points but then come crawling in when it's at the highs, complaining about not being here for the low. Laziness is all I'm thinking! Lol

Check the bottom of Boomy's posts.

It is funny that they sell to recover funds, isn't it? What I mean is, they also believe that crypto is going to go up in the future and what this implies, is that the reason they are selling is a way to increase stacks - which is a greed position, isn't it? :D

I'm sad that I didn't snag some bitcoin at 28k but I'm wondering if we will go lower than that so I'm not too worried.

BUSD/BTC hit 24,500 on the nose... I missed it...

When hive is 3 dollars again, all of these trades you are making will add up very fast, so too will the earnings. I know what it is like not to earn that much too, but I have also been a relatively high earner for a while now also. A lot of people don't get why, but some might realize it over time.

The "missed the lows" argument is interesting, as it is not like most people don't understand the history of it all. I know that for me, despite talking about preparing for the bear, I feel unprepared still and I am likely in a better condition than many. There is the talking about it and the doing it - sometimes for me, selling into stability seems like a backward step, but when the drop comes, I wish I had sold more into a stable to buy the dip - though... maybe not UST :D

Holding isn't stupid, but buying the top and selling the bottom is.

Exactly. That is just counterproductive to growing any account...

Have you lost, or gained?

Gained, but I would say the most I have gained is knowledge.

The more learned, the more earned.

This means that I was earning when the price was 6 cents and other people said, it wasn't worth their time. Well, from there, my time has gone 800% on today's prices, making the time in the past, more valuable than it was at the time I did the work. This is the same as buying HIVE on an exchange, just using sweat instead of fiat.

I absolutely love how you have put this into perspective. I was saying just yesterday that loads of people are going to suddenly vanish from Hive because they are going to think that it's not worth it to be earning half what they were - but they aren't seeing the bigger picture at all and in my mind, this is actually an even better time to earn more because whatever we earn now is bound to be multiplied as the price goes back up.

I might be foolish at times but I'm proud that I've started to see things in a different light to that conventional way. I bought the dip of Hive :) I enjoy the writing and the interaction, the people I've met along the way so it's not just about the earnings. As for the blurt guy, well we all know how much of a moron he is, he's very rapidly increasing his downvote trail fanbase.

Have a great weekend Taraz and fam.

People forget that regardless of price, there is the same amount of Hive in the pool. HBD does change, which is why so many focus on dollar values.

Having a slightly different perspective on what this place is, makes it so much better or worse, depending on the view taken. I see so much good in it, so buying the dip seems a no brainer. :)

Well done.

Many folks do Hive for the money. That may be why they look at it that way. Though financial reward is good, I am inspired by the opportunity to get paid to write. The creative opportunity is more valuable to me. It develops my skills and the stories and blog I write can be used elsewhere. It is not all about money. I write also in protection of family and children as a truther. It is nice to not have to worry about censorship.

Lot of things can get done for the money, but if it is seen as a job, you'd want to be good at it, right? Seems people want to be paid, no matter the quality of the job they do.

And yes, it is good to not have to worry about the BS rules of centralized platforms.

That's why I'm working with an 8-year time frame. I have faith that all projects I'm investing in will be in great shape by then so these fluctuations won't matter all that much in the long run.

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8 years is a good time, 2 to 3 bull runs between :)

This is true, Hive platform give benefit and self-development in various fields instead of wasting time in entertainment or work without developing capabilities

Ugh, those dang Blurt people. They used to be pretty coexistant with us, but there have started to be a lot of people trash talking now. It's sad and pathetic. I am definitely in the black. I was just showing my co-worker the other day how important it is to zoom out when you are looking at a chart. This was before all the stuff with Luna happened too.

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The worst of the blurt people are those who failed here through scam and poor behavior. Yet, still on Hive complaining about it.

Most of my crypto is unrealized but it's positive gains. At least I bought in before everyone was talking about the bull run in crypto. In the end, it depends on the roadmap and use cases for crypto. If you are keeping yourself level-headed, I think you will be fine.

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Yep - all of mine is unrealized too, other than what I have earned in fiat and then put into it. A level head seems hard for many people.

That's what I love about Hive. No matter how bad the market is you are still earning. Take this post now is on 54.08 Hive. Put in time and effort and you will never be at a loss. Your only opportunity cost really is what you could have done if you were not drafting up the post. Gone are the days I have put any of my disposable income in crypto. I just let the crypto I have do its thing. Hive is great for not having to invest much but the returns are massive.

And the op cost is low, since when I draft I would probably be wasting that time otherwise :)

I still put small amounts in, but I now have enough I can trade crypto for crypto too.

During times like this no matter where investment is, all are taking a beating, hang on and hold out for better tomorrow.

This volatility was to be expected after lockdowns no employment, now wars possibility of extreme inflation, keep a cool head!

Yep - and the volatility isn't over by a long shot - We might have hit bottom, but I think we are likely currently bouncing.

Too much has transpired over the last couple of years, world economics ready to implode.

A friend of mine said on discord the other day, "bear market makes money, bull market makes rich." But for this, it is necessary not to be stupid as you mentioned. Even though I couldn't evaluate this drop very well, I increased my liquid hive count a little bit. It will make me happy, if not rich, when we enter the bull market. Let's see.

That is a good saying - as long as you don't spend the bear money and reinvest it, the bull will make you happy.

how many people in crypto are actually in a loss position?

If we talk about HIVE, we are not in a loss position because we have started from scratch. However, some people considering themselves genius might think that we are in loss for not selling HIVE at least few days ago.

Well, we are still in profit even if HIVE drops below $0.10

I am up - like most people. I have also bought significant amounts of HIVE over the years too :)

I haven't bought yet, but I think to buy after reaching 1000 HP.

I believe it depends on how we see the market prices and the investment made those that are after higher prices when Crypto goes up are those that really don't want to invest for long but for the interest attached so they can withdraw and experiencing a dip in price can weigh them down because to them all investment and profits is gone and this is because they are not risk takers

People feel so happy when prices are up, but don't prepare when they fall - some learn.

You completely reverse the logic of thinking in interpreting the advantages and disadvantages. You will influence many people who read your review, they are lucky to read this review, including me.

In my opinion, seeing a risk should be a simple thing, it's just a matter of letting go or holding it. One must be more observant in expectations and react to the ups and downs of an asset. You're right, everyone has to be good at dealing volatility.

People struggle to let go of what they are emotionally tied to - which is also why it is better to invest into what people actually use.

Completely true, Sir.
I would call this an investment in primary needs. This investment will never go out of business. It will always grow and develop as the emotional attachment deepens.

The entry point matters here yes. Appreciate your analysis.

And have you bought more LUNA @tarazkp ?

I sold what I had last night for a loss. Bought more in the morning and sold for a break even before the delist - small amounts :)

That's an investor's move 😀

Wow. You write with some much anger and yet still calm.

Well, the changes in crypto world or Bitcoin didn't started now, the whole rises and fall in market that has been making everyone scared of risking their money. Lets see what happened in 2018 crypto beer market. A lot happened

  1. Federal interest hike
    2)China trade war with theUS
    3)Spot ETF denied
    4)CME lauches Futures
  2. Largest crypto hack occurred all of these crazy things happened 4years that caused a changes in the market before the next hack, now in 2022
    1)Federal reserve is raising interest rate aggressively.
    2)China Covid-19 cases are causing big fall in the supply chain issues in the US
    3)Major bitcon spot ETFs continue to be denied. Just imagine
    4)Bitcoin futures were approved
  3. and now, NTFs

But the way bitcoin broke its resistance line, its far worst than what occured 2020 or 2021 if i'm right. Yes, all this have set trader in great alarm, so many decided to pull out and the cold risky taker keep on buying and holding, taking advantage of the changes in the market. Its like bitcoin or crypto market wish to start afresh which i cant say about that.

And for Luna been delisted from binance. Oh dear, i did made some cash with futures trading on that pair.

I keep telling people doesnt invest in crypto with money you can't afford to lose. Right now, i just fold am arms and watch things plays. And keep holding

I don't think the break down is so bad yet on BTC, but it is likely to go down again for a bit, considering the economic news coming out globally and the potential for FUD profit by the manipulators.

The founder of this failed venture claims to have a plan for UST's recovery, but the price action underscores the investors' distrust of Terra.

It might still tank, but it might not. People take risks.

I'm glad that you win and do not lose heart!

I might have been born heartless! :D

On Hive, I get to create and for me, that is highly valuable in a world where we are encouraged to consume instead.

I think that the fact that the world around us is structured to get us to consume instead of create has made innovation a scarce trait in the society.

Some years ago, my younger brother was able to create a working biogas plant. Something I was unable to do. It may not be that he is smarter than I am, but I think he was given the opportunity to be innovative and try new things. I wasn't. I was always being told what I should and shouldn't do.

I am yet to calculate my portfolio to know if I am in loss or profit. I feel anxious and scared about loosing my holdings. But, I think I would make a bold step to get it done... thanks to your post @tarazkp

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Yeah, exactly, I offloaded some ETH above $2k to ensure I had a nice allocation to take advantage of a severe crash... many will think that I am incurring a loss but I bought it in the dip of 2020 at approximately $100... it's actually a 20X...

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