Why Price Prediction efforts are often futile

It is that time again of the year, where everyone argues back and forth about where the price of Bitcoin will be at the end of the year. 100,000? 40,000? To be honest, it is getting tiring at this point for me to keep tabs on the amount of articles and videos predicting the future of cryptos.

yeah yeah tech yeah rich yeah lambo yeah rekt yeah SEC yeah decentralized yeah. You get the point.

I'd say, leave it to the future. Both predictions will be right, it is just the question of time. In the end, does it even matter?

Does it?

For most of people, the answer is yes it matters. It is an answer that will determine either you will break your bank or a new Lamborghini.

What am I talking about, this is crypto. It's all about speculation! We thrive on price prediction! We got rich because of it right? Errr...maybe? For some maybe. But some is not most, and certainly not all. That is an indicator.

There's 99% of investors who would like to disagree on if crypto can make you rich part, but rather not disclosing it. Let's count out those who got rich by scamming the communities, hacking, promoting scam projects, manipulation and all that. Losing trades are a stigma at the back of every traders. Of course not, they'll lose credibility. And the almighty right to brag. There go the motivation to keep the failures behind closed doors.

I think I have been convincing myself that if I predict the last trade right, I would be well off this time around. For far too long, only to play the same game, over and f**king over. I don't know about you, but I think I appreciate crypto for one thing and one thing only.

It gives us multiple ways of "doing things".

Some just want to stay predicting. Sure, do whatever makes you happy. But since I am not good with predicting or at least brave enough to lose my money through meddling with that risk, so...


However, as always, I am here to raise that awareness, or to provide you with;

Different Perspective

I might be one of those guys who tries to do things in different sets of ways, while having different perspective than most to achieve the same result. Does that makes me a contrarian? Hmm, maybe. I don't do it to be right, I do it, because it's just the way I am.

At the same time I am well aware of the fact that to be able to create some sort of income, I must do what the mass are doing, or at the very least, acceptable to the mass. There's no rewards in being different, its just provide me with different way of thinking and looking at things.


I decided to take upon this topic because I would love to access the critical thinking part of the whole situation with our market. This is, first and foremost, for myself, in order for me to attempt control of my own FOMO, FUD and the many subjective, biased voices and noises out there that could potentially affect my investment.

Ultimately, affecting my own well being.

To be honest, I am not fond of being asked what do I think about certain crypto, and where the price is going. If you have been my friend and have been reading my writings, I would say that the price could very well go up, down or just stay there, depending on the period we are in.

Nothing is ever justified, especially in crypto. There's so much reasons to why crypto prices are behaving the way they are.

Predictions are often gauge based on multiple sets of reason. Or just one. Which most think is and are accurate, well was, and were wrong. Multiple of dozens of times for that matter. The reason for why that is, is because of the Black Swan event.

A speculation game, is a mix of both gambling and educated researches. One that relies heavily on its predecessors' result.

Black Swans however, is the ever dominant driver, that in the end, rendered and rendering every scholarly advice and researches useless. Especially when it comes to financial endeavors.

The Black Swan

Black Swan event is simply an event that will affect how the whole market will move, and is 99.9% close to impossible to predict. For short, an unseen upcoming event. It can be good, or bad but mostly the later.

For example, the 9/11 terrorist attack in the U.S, Covid-19 lock downs globally, the bankruptcy of Lehman Brothers in 2008, and etc.

No one can ever predict those events to happen, and yet it happened and in the end affected the market wildly. The market influencers from big fintech companies, social medias, and so called market experts, then can put the blame of their FAILURES to those Black Swan event. Of course it is rightly to do so, but at the same time points to this:

Isn't it really risky to follow their advices and price predictions? Knowing that it only takes one black swan event to demolish everything that you build and potentially steer your further away from your dreams?

If you wish to know more about Black Swan, I suggest that you take your time to listen to this video/audiobook. Its a free audiobook anyway, no money needed to be spent. They have not taken it down for copyright yet, so I suggest you give it a go before that happen. Personally, I like listening to audiobooks while driving and during any other menial chores.

The closest we can get to the "best" investment advice is by following what Nancy Pelosi is doing with her own portfolio. No, I am not kidding. She's an insider, working with the government, of course she knows something is going to happen. See what the insiders are doing here: Nancy Pelosi portfolio performance.

Before the imminent lock down, these government's conglomerate sold off their stocks. lol. But beware, these "insider info" could also turned out to be wrong. That is why I said "closest" to the best we will have.

The allure

But why does people insist on trying to play catch up with the market on their own accord in the first place? It can be contributed by the sense of achievement that is drove by ego and the absolute need of showing off. Nothing beats the feeling of "I'm a self made millionaire". Doesn't it?


That does not matter anyway, because in the end of the day, predicting the market is like playing a coin toss. What it basically means is that it is a gamble from the start. No one knows for sure what will happen to Bitcoin by the end of this year. Even if someone "successfully" predict the price, it will be contributed by "Just a lucky guess".

Of course if someone said that, it will sound like a salty insult being thrown at the predictor. But no one ever stop to think that, the salty insult is actually, 50% accurate. Give or take. Because to predict between the up or down of the price, is actually 50% too, give or take.

Again, there can be multiple sets of reasons that could deviate the prices to either side of up or down.

Who knew Bitcoin will dump to 54K from 74K? Do you? I know I don't. But there's a feeling in my gut it would. I just.don't.know.when. Guessing when, can take a lot of time and effort.

Sometimes, the market too behaves accordingly to the prediction.

Let me use a story to illustrate to you what I mean.

Have you ever seen the movie Star wars? I know most of you must have. No no, I don't mean the new ones. They are atrocious. I mean the predecessors, the ones that took the world by storm (troopers) *pun intended*. Sorry. The movie series were a huge success, as one of the first space conquest movie back in the 70s and 80s.

Image reference: Star wars

But that besides the point. What I truly want to point out to you that sometimes we make our own evil.

Anakin Skywalker was a bright, kind hearted and caring young man who, in his "future prediction" by the council, that Anakin will be a force of dark to be reckoned with and will destroy all of them. But truly, the Jedi council was scared of him being too strong to control in the future.

All throughout the movie time line, all the justice he enacts on his enemies leads him to the conquest of power and then further into the dark side. He was treated as a villain, before he was even a villain. If the council had guided him from the very beginning, things could actually turn out different. In the end, Anakin, consumed by his lust for power guided by the dark side, ended becoming one of the most iconic villain in the golden screen we know today as - Darth Vader.


Of course we can say that it is just a movie, but this often happened in real life, to real people. People whom are being treated as criminal, even before they were a criminal, has higher tendency to act in a way that a criminal would. Things has a way to manifest itself, the moment you think about it. You are half way of being a failure, the moment you treat yourself as one.

There is a saying that goes "Be careful what you wish for and say", as often time they came into realization. If you wish that Bitcoin will be 100,000 by the end of the year, that means you and the Bull market will liquidate the shorts and potentially causing them to lose a lot of money. The same goes to the ones that wish Bitcoin will be at 40,000. Because they will cause Long options to be liquidated. Its a vice versa game.

Either way, people are going to get hurt and in the end, what you care about is only yourself and the ones that closest to you. I think that is one of the hardest thing to admit.

I find the need to put this here, because someone who reads it, will tend to get my message wrong. Whatever price the Bitcoin will be, someone will eventually get themselves Rekt. There is no such thing as WAGMI. Like I said in my other article "WAGMI anyone?".

That is what creates the market though. Can't win without any loser.

The Will of the Many

The market sways according to the will of the mass, if there are more Bull sentiment than the Bear doomer, then the price of the market will flourish. And again, vice versa. In the end, the market predictions happened, because there were enough influence in the market. Why do you think the media plays a pivotal role in the world of investing - manipulations and cover up. Not a conspiracy theory. Its actually happening in front of our face, every single minute of our lives.

FUD plays a pivotal role in this. A single one can destroy multiple of people's lives in a blink of the eyes and destroys price speculations.


Be careful when speaking of FUD, if you yourselves are uncertain about the truth of the matter. A word of advice, always check your facts because if you don't, especially when you talk to people, that makes you a d*ck head.

Charts

People also tend to gauge their predictions by using charts. I must say I do not understand it. One, because I really don't care about it. Secondly, I can't say that I haven't tried to. Although how can I hate something that I don't understand?

My opinion, it is truly futile. As the history tend to only record the few successful ones, and many other that has failed. Making the rates of success, is heavily manipulated to trick you and mold you into thinking otherwise, while making you their exit liquidity fund.

Maybe being a contrarian, is not so bad then? Who knows for certain. In this case, I learn of what NOT to do instead of following people's advice blindly.

Whatever model that you decide to use, to gauge the market trend and its future movements, will almost end being wrong. Some are getting it right by doing the wrong things, how is that even possible? Because it is all random.

Getting one right, does not mean that the prediction model is accurate. The reason why is because people tend to leave out the first 10s of tries before the 1 right prediction.

Someone managed to get their trade right after 1 try, sure, but can you guarantee higher chance of succeeding for the next 10 tries? Lost 10 times, win 1 time. Or win 10 times, lose 100 times. Or win 10 first, proceeding to lose 1000 times after. I won't bet on it. And that sounds quite stressful. People however, are drawn into randomness. It's exciting, and is destructive. Just like any gambling is.


The BTC halving chart is especially an interesting one to be honest. It is also the closest we can get in terms of movement accuracy. But will it will be moving in the chart's accordance after this?

Will it be wrong, for the first time? No clue.

What if China's government decided to take over the BTC mining companies over and control it totally? What will the market sentiment will be then? What if the U.S decided that they want to dump all of the confiscated BTC on their accounts? What will it be then?

What if the economic pressure, forces everyone to sell their crypto in exchange for a grain of rice and an ounce of water to survive? How can you successfully predict these events?

According to Nassim Taleb, the author of Anti-fragile, it seems the only one method to stay safe in the market by understanding WHAT COULD GO WRONG, instead of trying to navigate your investment through WHAT COULD GO RIGHT.

You just need to win once!

And there are people who said, you just need to win 1 Big time. Of course, this is a viable option. You could win one among the 10. But what if you will lose all 10? Does that makes you lose 100%? In the end, its a gambling. What if you tried 100 times, to try to win once. Before reaching the 100 try, you already break your bank and desperately tries to take a loan. Ooff..and leave those money in the market for "chance". Hoping that this time, randomness will choose you personally out of millions of possibilities.

SO

This is quite weird, coming from a guy who also invested in crypto. Isn't that what I'm doing right now? Yes, and actually No. I am investing in crypto, and I am just like everyone else, subjected to FOMO and FUD most of the time.


Hence the point I am trying to make. In order for me to avoid the trap of trying to predicting altogether, I make sure that I follow these few mindsets.

1. I get involve with crypto projects that I can put effort into and be rewarded by it. That is why I am here in Bulb. Because I earn through writing. Projects like Do to earn and Play to earn are why I think crypto is a great industry to be involve with. And get paid for the time I spent in here.
2. I make sure my crypto stays in the market as long as possible. Compounding is your one true friend in any type of investment. At the same time, I make sure that I get rewarded for the stay. And that is why I invested in cryptos that reward their Stakers with airdrops. Up or down market does not matter. It matters the most if I stay longer.
3. I don't predict, full stop.
4. I diversify into multiple of assets, instead of just in crypto. That means I allocate time and resources into adding new skills and its improvement as well.
5. I invest into Bitcoin knowing what it could potentially become, but not the price action. Of course, the lower the entry point for the investment is preferred. More BTC, the better.
6. I will never ever invest more than I could afford to lose. Even if that means I'm losing the opportunity to become rich overnight.
7. Access market Narrative - always follow the trend, because that is what crypto market is. And money will always move towards where the money flocks. That is if I want to trade. But most of the time, this is the last thing I would do.
8. The best investment advice that I ever known is to never lose your money. Period. That means I will never play the speculation game, be it in NFT, or in crypto. Sure, you can say that success in wealth is all about taking chances. I do, I'm taking chances in what I'm doing right now. :D

My 2 cents

Anyway, I impart you with this in mind. You may do what you wish to do, it does not matter anyway. Market will flow as it always has been, with the occasion of few Black Swans here and there. It is good to follow your own principle, because ultimately you want to shape your own future that you will be satisfied with without leaving no regrets on the table. Believe in what you believe in, but do it ever cautiously.

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