Bitcoiners Not Following an Investment Strategy But Religion says Black Swan Author, Nassim Taleb
After plummeting as much as 23% and just under $45,000, Bitcoin is already back above $50,000.
As we reported, the heavy loss resulted from liquidations of leveraged bets, which sparked a cascading effect on the prices, as noted by Lan Gu of Alameda Research, a crypto trading firm who said Bitcoin’s losses were “compounded by the amount of liquidation.”
Amidst this, US Treasury Secretary Janet Yellen said Bitcoin was a highly speculative asset and is extremely inefficient at conducting transactions.
The recent sell-off came following a wild rally that had the prices of Bitcoin surging from $29,000 at the beginning of the year to Sunday’s all-time high around $58,300.
“The kinds of rallies we’ve been seeing aren’t sustainable and just invite pullbacks like this,” was Craig Erlam, senior market analyst at OANDA’s view on the market.
“It was an extremely overbought market.”
During the market-wide sell-off, Nassim Nicholas Taleb, who sold his Bitcoin recently and changed his views on the cryptocurrency, commented on Bitcoiners by comparing them with amoebas who” think in the binary form” and are “convinced” others do the same.
“When you invest/trade, you buy & you sell; you increase/decrease; you get stopped out/take profits; you revise dynamically; you protect your tail; you walk away when needed to clear your mind,” said Taleb.
He cited volatility as the reason for dumping his Bitcoin, and this time he says instead of an investment strategy, it is a religion.
“The minute someone defines herself or himself as a ‘bitcoiner' like a national identity, it becomes an irreversible ideological commitment, not an investment strategy. Actually, it is a religion. You ‘belong' to a group of amoebas.”
Meanwhile, much like the leading digital currency, altcoins are making a splendid recovery, and the overall crypto market has gone back above $1.5 trillion.
Among Wednesday’s green market, the notable gainers include Augur (44%), RUNE (42%), MATIC (35%), SNX (34%), UNI (33%), COMP (32%), The Graph (31%), and SRM (30%) just in the last 24 hours.