Reading time: ~2 m
Ceo of Intelion Data Systems Timofey Semenov in the author’s column on “RBC-Crypto” told what are the strategies and scenarios for the development of events during the “crypto winter”
The opinion of the author may not coincide with the position of the editorial board. “RBC-Crypto” does not give investment advice, the material is published solely for informational purposes. Cryptocurrency is a volatile asset that can lead to financial losses.
The “crypto winter” has just begun, the end is not yet soon. Miners are waiting for the end or some bottom to buy equipment profitably, but they may not wait – this moment is impossible to predict. Therefore, it is more correct to diversify risks and break the planned purchase into several iterations – for example, to purchase equipment at intervals of three months. Thus, there will be four iterations to increase the asset in the form of mining equipment over the next year.
Why is that?
This is a trading and absolutely market story. Everyone is waiting for something, it is obvious, and when in six months many players will believe that the “crypto winter” is about to end, they will begin to buy. “When everyone sells, buy, when everyone buys, sell.” The closer the end of the “winter” is felt by investors, the higher the demand for equipment will be. And, accordingly, at the very end, the demand will be maximum. Over the past five years, the market has become very popular, everyone knows about it, including large Western investors. Obvious actions like “I will wait for the end of the “crypto winter” and in a year I will buy” simply will not work – the whole market will do this.
Has the optimal entry point arrived?
Nothing good is expected in the near future. This is such a psychological moment, just revealing the principle described above. Miners who have already bought equipment, in the near future will be in the “crypto winter” for another year: pay for electricity and wait for the rate to grow. That is why now the price is very low and there is no demand, at such moments you need to buy. Yes, at the end of the “crypto winter”, the rate may also be at the level of $ 20 thousand, but the demand will be significantly higher, and the price of equipment will increase.
Why does everyone think that the bear market will last another year?
They look at the graph and compare the situation in 2017 and 2020. In 2016, there was a decline, then in 2017 – strong growth, and then the whole of 2018 and until mid-2019 – the “crypto winter”. A slight upswing followed, with the market rising by about 50%, but then it fell again until the summer of 2020. Many are sure that now the same thing will happen again: the recession will last until the spring-summer of 2023, then a good rise will begin. And already rapid growth will start from the end of 2024.
Right now, about half or more of experienced players are guided by this. But the best entry point is impossible to predict, it is always worth diversifying.
The main rule of the market is that you need to buy an asset as cheaply as possible. The asset in our case is computing power. The lowest prices for mining equipment will be in the coming months, and by the end of the “crypto winter” they are likely to grow. And most importantly, the strategy is not to invest all the funds right now. It is important to diversify investments, including in time.
In addition, another of the advantages is that Russia is in a geographically advantageous position and the price of electricity here is one of the lowest in the world, so in the event of outages of miners, Russia will be one of the last countries where cryptocurrency will cease to be mined. At the same time, due to mass shutdowns of equipment in countries with expensive electricity, the complexity of the bitcoin network has always decreased, which made it possible to earn more in those countries where the mining process continued. Due to this, miners from the Russian Federation almost never went to a loss, only if they did not extract digital currencies on outdated equipment.
It should be borne in mind that the main asset is very volatile and can fall more. Therefore, diversification in time is important: if bitcoin falls to $ 10 thousand, it will be possible to buy even more equipment. The point is to keep liquidity in money (currency), and not in real estate or anything else. Because the live “cache” is the most liquid. It is needed to have time to buy in a severe crisis, when everyone is selling. Usually, in such conditions, few people have liquidity.
Let’s say you have $100,000 that you want to invest. Invest $20,000 and see three months later what happened. And then invest the same amount again.
You need to learn to be a good speculator, to remove emAnd it’s a sensible look at this story. Firstly, without emotions, and secondly , not like everyone else. Now there are a huge number of players who are waiting for the end of the “crypto winter”. Due to them, as a result, the demand for equipment will grow significantly. It is difficult to give any accurate forecasts. But the price for terahesh can grow by 40-50% even if the market remains at the current rate of $ 20 thousand.
#equipment #rise #price #Strategy #buying #mining #devices