The first cryptocurrency is just about 10 years old, and throughout its short lifespan Bitcoin's asset class has caused quite the uproar in financial, business, and countless other circles. It is easy to observe how the nascent crypto market changes shape with each passing year, as status quo authorities and relentless enthusiasts continue their epic game of tug-of-war. In 2017, cryptocurrency was a groundbreaking evolution that threatened to upend the finance sector. In 2018, it was a failure that missed its previous targets by a mile--and in 2019? Cryptocurrency seems boring, a comatose version of its prior self.
However, boredom is one of the most powerful sentiment signals that one will glimpse during the historically visible cryptocurrency bubble cycle. It's even described explicitly by Gartner's infamous Hype Cycle as the "Trough of Disillusionment", which represents a low point before ideas mature into productive technology. In 2019, this means that legacy cryptocurrencies like Bitcoin and Ethereum are becoming useful, even if they're no longer exciting. Funnily enough, the promise of productivity is what spurred the bull run bringing Bitcoin to $20,000, even if this promise is only now at the earliest point on the path to fulfillment.
Accordingly, right now may be the best time to embrace blockchain in all regards. Fundamental progress is pushing forward every day, just as technical trends demonstrate that most tokens have receded to historical levels likely for a reversal. For those who realize today's market looks a lot like prior post-bull lulls, the best way to position themselves for the natural swing back is to use two ideas: accumulation and participation
Easing In While the Water Warms
Accumulation means to slowly collect assets while they are undervalued, or "on sale", as denizens of Reddit's many cryptocurrency sub-sites like to say. At the present levels, with Bitcoin under $4,000 and Ethereum under $150, many people have begun to accumulate due to the observable patterns in the charts of these assets. One of the most popular measurements for predicting the end of a bubble is simply the percentage drawdown of the bear market following historical bubbles: for Bitcoin, it's between 80% and 90%.
With the price having already plunged through these levels for most altcoins, even if Bitcoin has only slightly pierced through the low bounds at $3,100 (an 85% decline), experts recognize that the time for intelligent accumulation is nigh. Most employ a dollar cost averaging (DCA) model to do so, investing their fiat into a healthy mix of cryptocurrencies as they float near suitable levels. This ensures that one's entry price is the average over a defined period of time, reducing immediate exposure to steep movements both up and down.
Financial institutions of nearly every discipline have the same idea and have begun to accumulate at least in small amounts at the behest of their clients. With a 1% Bitcoin 99% USD portfolio beating the S&P over the last decade, it's hard to ignore analyst calls for crypto exposure, and if new derivative instruments like XBT on the CBOE won't cut it then large-cap investors can expose their capital to the crypto market through solutions like Coinbase Custody. Furthermore, funds vying for ETF approval are huge sources of potential volume, as the assets they've petitioned regulators to approve must be settled in the underlying.
On the retail side of things, everyday investors have countless more inroads for their fiat into cryptocurrency than they did just last year, and new blockchain services make investing a more accessible experience. Platforms like Blox help investors who have multiple wallets and exchange accounts manage and track crypto portfolios from their powerful dashboard, which makes it easy to visually comprehend and maintain control over their capital.
Participation is Primary in Success
With the cryptocurrency and blockchain ecosystem expanding in all directions at once, low prices make the idea of getting in at the ground floor that much more lucrative. So many innovations are being born, and with an ear to the ground you have a better chance at finding those that will set the bar for future applications of blockchain. Those who simply watch and wait for Bitcoin to go back up are missing the boat here. Participation goes beyond knowing about which tokens to invest in and is more about identifying new utilities for your cryptocurrency.
Upstart decentralized applications (dApps) like MakerDAO enable investors to use their cryptocurrencies as collateral against a loan for DAI stable coins. This idea has caught fire in the cryptocurrency community because it has reliably reproduced the idea of leverage but in a completely decentralized environment. For traders, rudimentary comprehension of Maker can mean more returns. True enthusiasts will know that a more advantageous opportunity may be to hold MKR rather than margin trade, as they can essentially become paid network nodes that support the idea in its entirety.
Ideas like these are taking off daily, and many like Maker have a good chance at becoming a cornerstone of the future crypto market. Ignore the fact that prices are bottom-barrel at best, and instead play the long game with your capital and educate yourself about where the blockchain phenomenon is heading. Dig into some fringe ideas and explore them from the inside. One of the most unique things about the decentralized ledger is that companies built on it are more transparent, so use this as a way vet the next generation of blockchain achievements for yourself now, and reap the rewards later.