Elon Musk and the Mysteries of the Cryptoverse
Over the past couple of months, and what looks likely the foreseeable future, the entire internet is going to be enamored by the happenings of the mystical Universe of The Cryptoverse. Although it is nothing new, the craze for it and its awareness has reached an all-time high in the recent past. Cryptocurrencies have been around for more than a decade now, and the first cryptocurrency to ever exist was Bitcoin in 2009. As many of us are advertently or inadvertently aware that Bitcoin has scaled peaks of its valuation like no other means of exchange in existence ever has. At its peak during mid-April 2021, its value was $64,863.10, or in terms of rupees, it was ₹4,724,423.68 per Bitcoin. Owning a single Bitcoin would have made so many people’s dreams come true. Alas, not everyone is as fortunate or has the chops to have invested in Bitcoin during its early years when it was going for $0.06 per Bitcoin in 2010.
Along with the rise and rise (and some dips now and then) of Bitcoin, what the world has witnessed is the blooming of a zillion (figuratively speaking) other cryptocurrencies in the market. With each occupying its own space on the digital network and each offering its buyers and investors or the community, similar returns like Bitcoin. While the likes of Ethereum, Litecoin, and many others have carved out a niche for themselves and have made their investors thousands, millions, and billions in fiat currency (dollars, rupees, etc), countless other cryptocurrencies came into the digital world and then either failed to gain traction or buyers or were simply scams that looted money from the gullible and vanished.
The world of crypto seems very confusing, flashy, fast-paced, or even a means to get rich quickly to an outsider depending on what lens they are looking at it from. It’s neither of those things and all of those things at the same time. Perplexing, right? But that's the dichotomous nature of its existence. It sure is complex at first and would seem all fancy and beyond comprehension. But once you stick long enough to it and do your due diligence and reading up on the topic, it’s not that different from any other form of investments in layman terms. Albeit, no other investment probably has ever given the sort of returns that Bitcoin, Ethereum, etc did. But I don’t think that their initial buyers and investors anticipated these sorts of returns in such a short interval.
In the past year or so, the internet has been enamored by its favorite billionaire, Elon Musk, and his tweets about cryptocurrencies. His being one of the co-founders of Paypal (a digital payment method) gives him levity in these matters, as if his other hugely successful and futuristic ideas and companies were not proof enough. He has the sort of a cult following that no other billionaire in this inequitable world with unequal wealth distribution can ever imagine having.
Elon Musk has been tweeting and talking about cryptocurrency a lot, and more precisely it has been about the cryptocurrency named after the internet’s favorite being, a dog. The currency is Dogecoin and Elon has been nicknamed the DogeFather. His announcement of funding the 2022 Space-X moon mission entirely using Dogecoin carrying the satellite Doge-1 to the moon has been nothing but pathbreaking. It sent the Dogecoin community and holders of other cryptos into a frenzy. Alas, this frenzy could not prevent the crypto market from crashing drastically. His announcement regarding Tesla stopping the use of Bitcoin due to its high environmental cost of mining(computer/digital mining), sent the prices of Bitcoin crashing by more than 50%. And since the big daddy of crypto fell, the other currencies followed suit and fell significantly.
It has come to the stage where people are holding onto their breaths and looking at their crypto wallets while they wait for Elon Musk to say just any word that is pro-crypto. This won’t be a bad way to make your investment, judging by his Midas touch. But if one thinks of the bigger implications this has on the crypto-verse, then one has to think that how did currencies that were supposed to be decentralized and not governed by any institutions, become so volatile. How did it come to this that one person’s tweets could make it go on a roller coaster ride?
To my untrained and non-financially educated mind, it seems that what makes the crypto-verse strong is also its biggest weakness. Since it gives power to the people, most of whom including yours truly don’t know much about what they are grappling with. And in this sense of being lost in the wide crypto-verse, dreaming of a rainy day, we look at some or any hints from anyone who we think or know has an idea of what they are doing. Which for most of us is the Lord and Saviour of the human race, Elon Musk. If he is going to succeed in taking the human species to Mars, then for sure he can take the crypto “to the moon”.
This makes the entire crypto-verse/crypto-market, highly volatile and it is due to which the big Whales (ones owning huge amounts of crypto) make their move and earn huge amounts of profit by dumping or pumping crypto. Thereby making the market unstable to an extent that many people end up losing their entire savings or investments, while The Whales rejoice in their glory.
The only antidote to this is for the normal, ordinary folks that make for the majority of crypto holders and for whom cryptocurrencies were designed, to develop Diamond Hands. Diamond hands are nothing but buying some of the other cryptos of your choice (after due diligence) and holding onto it for the long term, i.e. some months, years. And to not buy or sell at the first signs of market volatility. Surely there’s money to be made day trading on crypto, but looking at its unpredictability, it is a better bet to build your portfolio and hold onto it.
Only invest what you can afford to forget about and won’t need to use for your day-to-day expenses. And do not under any circumstances put your entire money or savings into one cryptocurrency. There are so many cryptos out there for you to diversify. So just do that and leave it be or buy/sell depending on your need and additional savings respectively. Do not fool yourself into believing that you’ll be a millionaire overnight. This is not a piece of financial advice, but it makes sense to me, and maybe it will to you as well.
So, my fellow inhabitants of the Crypto-verse, unite and show Diamond Hands (or not) and just have a good time with the community that we are at the forefront of.
If you are interested in reading up about the dynamics of how Money works, I recommend the book “The Psychology of Money”.
To the Moon…….
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