full image - Repost: In your experience, how predictable is the market? (from Reddit.com, In your experience, how predictable is the market?)
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I feel there are three types of people who use crypto. With that being said, someone may be a combination of two or all three typesLong Term Investor: The person does not care about short term price action. They believe that if the project is good enough, it will be immutable and last forever - or at least outlive their life span. These people DCA during market cycles or all year at a steady pace. They are affected by global news and market conditions. Any good news about the projects they are investing in just acts as a catalyst to buy more and continue to HODL. The person may employ the use of dApps to obtain APY/APR on their investments.Trader Investor: The person cares about short term price action. Crypto news and crypto related market conditions control the actions of this person. The person generally tends to buy coins with utility, but may buy useless coins in order to take advantage of market trends and fads (example: meme coins or coins tied to a centralized authority or business). This person may also use leverage trading techniques to long or short crypto in anticipation of good or bad news. If the investor is smart, they are usually up to date with news about projects running on the blockchain they’ve invested in. They could also be invested in assets running on a larger network such as NFTs or subassets like ERC-20 tokens (in the case of Ethereum).Regular User Investor: The person really uses crypto (perhaps they are a business, developer, or NFT artist/innovator) - they regularly deploy crypto for transactions, powering networks, applications, security or sales infrastructure, web3, digital art… (use cases for crypto are becoming endless). They are interested in the utility of dApps, DeFi, and NFTs running on a main network. The person is extremely up to date with crypto projects and good news on the network they are using, along with crypto-related cycles and market conditions. Real world news is only important to them if it is pertaining to the adoption of crypto. They forward to both positive and negative news about crypto. This person may regularly DCA but because they are buying crypto they regularly use, they generally care about short term price action as well. The investors buys and HODLs layer-1s collecting small profits when they are in the green and buys when there is bad news or when good news is sold. The investor may also buy layer-2s but would prefer layer-1 projects that are infinitely scalable.People have argued that the market is extremely predictable and others have said it is not. I think a lot of people mistaken predictability with volatility. The market is extremely volatile, as it moves with a billion different factors. But these factors may be predictable and with some informed intuition (or educated guess) we can some of times be right on our predictions. BTC maxis believe BTC will continue to go up until all the rewards are exhausted. Bitcoin is a precedent and the “too big and established to fail” mindset comes into play once all the rewards are mined. Bitcoins will be even more valuable as there are less of them because of supply and demand. Futurist thinking says that bitcoin will continue to stay relevant from all its integrations and spinoffs.But at the same time: what if the rewards were the only incentive bitcoin had? Proof of stake networks would predict that bitcoin fails after it no longer can offer rewards as an incentive, as the rewards are the only incentive to using bitcoin now that there are faster and cheaper alternatives.I don’t think that the crypto market will ever correlate with anything other than mass adoption. Fear and Greed Index only tells you so much though.
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