Hodling Bitcoin is a Better Option for Inexperienced Crypto Traders, Says Ex Coinbase CTO
As much as there is emphasis on cryptocurrency as a means of payment, it is impossible to ignore the fact that it is also a very viable investment to as evidenced by not only the earliest investors who made significant profit on their investment but also the fact that millions around the globe are actively trading in bitcoin and other tokens as a means of making profit. Between the bear market and bull markets that have occurred and the current recovery the market is seeing, the crypto markets can be likened to the dot com bubble of the early 2000s in which there was a great chance of making significant forms from an emerging market.
Unfortunately, just like any other emerging industry, there is the problem of not only profits being made but also the issue of scams. This was particularly prevalent in 2017 when ICOs were all the norm in the crypto industry and many scams were present and the SEC was forced to shut down a number of them due to non-compliance are being fraudulent.
Some millions of dollars were lost to the various scams and various regulatory bodies took action to protect investors from them. As the crypto industry continued to see maturation over time, the number of projects within the ecosystem also increased as they are now over 1000 different cryptocurrencies from different issuers and for different purposes which can lead to a sense of confusion among users in the crypto industry as well as those outside the space. Obviously, not all cryptocurrencies are genuine as there is the term shitcoins refers to nonsense cryptocurrencies that have little value and while those within the industry might be fairly apt at spotting shitcoins, those outside may not.
To Hodl or Not?
Now Balaji Srinivasan who is the former CTO of Coinbase, has tweeted on the matter by stating that investors who are not fully informed about the crypto space should be wary about investing in it as while there are a few people who can make profit and beat the market, buying cryptocurrency with was likened to buy vanguard in traditional equities. It was also stated that investing in traditional assets of bitcoin should be held as a long-term investment
The likening of the crypto industry to the dotcom bubble is the fact that is in that bitcoin has dominated the market but has also brought rise to ethereum which brought smart contracts into the world and has created more use cases.
1) ETH is/was also both a phenomenal investment and a major technological breakthrough.
2) Some other digital assets are very promising; I don’t believe innovation ends with BTC and ETH.
But for the person outside the space who wants exposure, just buy BTC.
— Balaji S. Srinivasan (@balajis) June 22, 2019
The essence of his tweets is that those who are inexperienced in the crypto space should not rush into trading into it in a bid to take advantage of going prices but instead, hodl to enjoy long-term benefits.