Jesse Livermore: On Bitcoin
A LESSON TO BE LEARNED…
O n the eve of departure for a European vacation, Livermore said, “the most intelligent way to get one’s mind attuned to market conditions and to be successful is to make a deep study of crypto-currencies in order to be able to distinguish the good from the bad; Get long of those which are in a promising position [Bitcoin] and get out of all shitcoins.
…I regard it of great importance to call the attention of the readers to the above facts, because it has been shown time and again that in crypto, people very often fail to see the thing that is right under their nose. We now have millions of people interested in the crypto markets, where there were only thousands in former years; and I cannot emphasize too strongly the importance of the utmost discrimination in the purchase of crypto-currencies at the present time.
“One of the greatest mistakes inexperienced investors make is in buying cheap shitcoins just because they are selling at a low price.”
A s a matter of fact, price is not always an indication of cheapness, because non-liquid shitcoins have a certain speculative value that usually causes them to sell at more than they are worth on the basis of either speculative use-case or a plagiarized white paper. While it may happen that in many instances shitcoins advance from $0.03 to $0.04 a coin to over $1.00, a very much greater proportion of these low-priced shitcoins have sunk into oblivion by lack of development, or else they have struggled along striving to gain adoption for years and years, with only the faintest prospects of ever delivering on their promises or use case.
“In selecting cryptos, it is only necessary for an investor to determine which crypto is in the strongest position [Bitcoin] and which are less strong and are comparatively weak…very weak…basically all shitcoins.”
AVOID THE SHITCOINS
M any investors do not discriminate between strong development and weak shitcoins; and in failing to recognize these essential differences, they place themselves in a position to lose many excellent investment opportunities. As Mr. Livermore says:
“It is best to avoid the weak shitcoins entirely.”
I should particularly avoid the lower-priced shitcoins that have not a strong technical foundation, because when a declining movement does set in, shitcoins representing these weak use-cases are the first to go and they recover only with the greatest difficulty, if they ever recover at all. Thus, we should avoid getting hung up with these cheap shitcoins, and ICOs that are poorly thought out, for without ample development, such concerns will have a hard row to hoe under severe competition from Bitcoin.”
“Just as I would avoid the weak shitcoins, DeFi projects and ICOs, so I would favor the strongest developers and the strongest source code. I would choose those projects that face a most promising future, like Bitcoin and the Lightning Network, so far as can be seen under present conditions. We must, of course, be able and willing to revise our forecasts in the light of developments that come to hand from day to day.”
From the above we learn that…
“the attainment of spectacular and permanent success as a Bitcoin hodler requires that one devote his life to Bitcoin.”
He should also be possessed of a certain character adapted to this line of work; especially marked abilities in this field, as well as a strong desire to succeed therein. The average shitcoiner who has devoted a good part of his capital to other projects is rarely fitted to become what Bitcoiners recognize as a hodler, but he can, without interfering with his regular shitcoinery, acquire an understanding of Bitcoin and become a scientific and successful investor in proportion to the effort, capital and intelligence he puts into understanding Bitcoin.
Adapted from:
“Jesse Livermore’s Methods of Trading in Stocks by Richard D. Wyckoff”
