How I View Opportunity (with any investment I make)

Hello, Friends! This is Richard, founder of Short-Term Rental University and Airbnb super host. On today’s Monday blog I want to talk about what’s on my mind which is

“Is crypto mining disruptive or dead?”

The point of this article isn’t to convince you to do anything you’re not comfortable with. Is is not advise that you speculate or invest in cryptocurrency. This is a way for us to talk about how I think about opportunities, markets, growth, disruption, and dislocation. My basic premise is:

Everything takes a lot longer than you think. Nothing is particularly easy and the people that understand, learn, actually do the most, and do things for the right reasons generally win.

As many of you know, I’m a pretty heavy investor and a huge believer in blockchain and Bitcoin. I started investing over a year ago and while the markets have gone both straight up straight down, it hasn’t changed my fundamental belief. In fact, I’ve got so much on it that I wanted to learn a little bit more and the best way for me to do that is to get granular.

I think you’ve seen some of the videos where we’ve started creating a GPU mining facility. You’ll hear about how Bitcoin mining, GPU mining is dead sometimes you just have to stop and pause and say, “The trader in me ‘says not so fast!'” and why? Here’s what happens in any sort of speculative frenzy.

The market price will rise really quickly,
people that don’t know anything enter late,
they’re just speculating,
they get in at the very top.
Then they are the first to sell as we start to roll over.

The selling can actually accelerate and become really really painful. All things being equal, that can be a really good opportunity, especially if you have a longer-term mindset. That’s what I have. Whether I’m right or wrong,

1 – I’m learning
2 – I’m doing
3 – I’m taking risks
4 – I’m betting on myself in the future.

Now if I’m right, what I’m doing is betting that the people that are selling either have higher electric prices (which they likely do), they’re in it for the wrong reasons, they don’t have as long-lasting standing power and then they don’t understand necessarily how long some of this disruption and innovation can take.

Using the internet as a model.

When the internet happened and the “.com boom” started in the 1990s and early 2000s, everything that had a.com associated with it went through the roof. The stock price went wild and there were ridiculous business models that raised all sorts of venture capital. Yet, all of them went away as well. They weren’t repeatable, sustainable businesses and they were just on a trend.

That didn’t mean that the internet died or that there was no place for the internet. It didn’t mean that the internet didn’t disrupt and change our lives, I would say the exact opposite. As you sit here today you’re reading this on the internet. YouTube is bigger than ever, mobile phones are more present than ever before, and we are using the internet far more. What happened was a real dislocation between price, availability, and opportunity that had to be reconciled.

That’s what I think we’re seeing right now in the crypto space. So as people that got into mining at higher electric prices and paying more money than they needed to for rigs start to:

Sell them
Flood eBay
Putting everything on sale

People that have a longer-term vision like myself are going to have lower difficulty rates. There will be fewer miners since people are shutting them off and closing down. I also believe that there’s going to be higher prices going forward. Whatever we’re mining is going to be worth more in the future than they are today.

Do I like the sell-off?
Do I like my mark to market?
Do I like what’s going on today?

No, of course not! But, am I able to think about

the future?
why I’m doing this?
what I hope to learn?
what the investment is?
what the strategy is?

Yes!

That’s the point of this article. Do not confuse a mark to market or a loss today about the future opportunity. Think about why you’re doing this and what you hope to get from it. If it’s really just a day trade, just flip a coin, go into a casino, put it all on black, or bet on the Super Bowl.

If you think you’re doing something for the right reasons do not pay as much attention to the market dislocation. In fact, try and be contrarian as things. Sell-off is generally the best time to buy. It reminds me of the famous Warren Buffett quote

“Be fearful when others are greedy and be greedy when others are fearful.”

Please go ahead and like the video and article. Let me know what you’re speculating on, investing in, what your future beliefs are about crypto, I want to hear it all in the comments! In the meantime please go ahead and subscribe to the YouTube channel, I’d appreciate it very much!

YouTube Link: https://www.youtube.com/watch?v=IVeOgv_VRHA

Check us out across the web!

Leave a Comment

Your email address will not be published. Required fields are marked *