1/Intro
ADA is an investment for me, it’s not a religion and it’s not the purpose of my life
ATM #Cardano accounts for 90% of my portfolio
For good or ill, there may be a moment when I feel the need to sell some or all of my holdings. This is an exploration of those scenarios
ADA is an investment for me, it’s not a religion and it’s not the purpose of my life
ATM #Cardano accounts for 90% of my portfolio
For good or ill, there may be a moment when I feel the need to sell some or all of my holdings. This is an exploration of those scenarios
2/Reason 1: Nakamoto Coefficient goes down
This measure is a means of seeing how many entities control Cardano as a network. BTC started at 35, now it’s 5, ETH is 2
Cardano is at about 22, if it becomes comparable to BTC, or ETH, I’m out
(thanks to @matiwinnetou for charts)
This measure is a means of seeing how many entities control Cardano as a network. BTC started at 35, now it’s 5, ETH is 2
Cardano is at about 22, if it becomes comparable to BTC, or ETH, I’m out
(thanks to @matiwinnetou for charts)
3/ Why is the Nakamoto Coefficient important?
Decentralization is THE crown jewel that blockchain has. Otherwise, you can do almost everything that crypto does with an Excel spreadsheet, and at a fraction of the price
Once we lose decentralization it rarely (if ever) recovers
Decentralization is THE crown jewel that blockchain has. Otherwise, you can do almost everything that crypto does with an Excel spreadsheet, and at a fraction of the price
Once we lose decentralization it rarely (if ever) recovers
4/ Reason 2: Sunk-Cost Fallacy
Big projects occasionally come across some obstacle that they can’t defeat
Leaders make it a point of pride to overcome them and waste a lot of effort on these crusades. This often leads them to overcommit and put what they’ve built in jeopardy
Big projects occasionally come across some obstacle that they can’t defeat
Leaders make it a point of pride to overcome them and waste a lot of effort on these crusades. This often leads them to overcommit and put what they’ve built in jeopardy
5/ Napoleon in Russia
If I sense Cardano has entered into a huge fight it can’t possibly win, while throwing good money after bad, trying to win the war, I’ll exit
For example, if Cardano antagonizes China over data management solutions in Africa
If I sense Cardano has entered into a huge fight it can’t possibly win, while throwing good money after bad, trying to win the war, I’ll exit
For example, if Cardano antagonizes China over data management solutions in Africa
6/ Reason 3: Change in Culture
Cardano is one of the few projects that understand that Rome wasn’t built in a day. It’s a painstakingly long process that needs care and deliberation at every step.
If the community values short term gains over results & tech, that’s a red flag!
Cardano is one of the few projects that understand that Rome wasn’t built in a day. It’s a painstakingly long process that needs care and deliberation at every step.
If the community values short term gains over results & tech, that’s a red flag!
7/ Reason 4: Token Shenanigans
I don’t want things like token burning, “taxes” designed to limit transaction numbers or sales, punishing lockup periods or any sneaky token sleight of hand to pump up the TVL (looking at you Luna)
If Cardano starts with any such nonsense, I’m out
I don’t want things like token burning, “taxes” designed to limit transaction numbers or sales, punishing lockup periods or any sneaky token sleight of hand to pump up the TVL (looking at you Luna)
If Cardano starts with any such nonsense, I’m out
8/ Why token shenanigans are bad
These are all measures meant to artificially increase the token price, or stop it from falling too much.
If ADA wants any hope of becoming a widely accepted currency, then it must not impose artificial boundaries on people’s transactions
These are all measures meant to artificially increase the token price, or stop it from falling too much.
If ADA wants any hope of becoming a widely accepted currency, then it must not impose artificial boundaries on people’s transactions
9/ Reason 5: It Becomes Overly Political
A recent trend, especially in Catalyst proposals, is to make measures overly political statements instead of focusing on utility and practicality
If this becomes normal, it will result in infighting which will constantly undercut Cardano
A recent trend, especially in Catalyst proposals, is to make measures overly political statements instead of focusing on utility and practicality
If this becomes normal, it will result in infighting which will constantly undercut Cardano
10/ Reason 6: IOHK doesn’t relinquish the crown
IOHK calls the shots but they’re supposed to let go of the reins and let the community take charge in the near future
If this doesn’t happen within the next few years, it’s a cause for some concern
IOHK calls the shots but they’re supposed to let go of the reins and let the community take charge in the near future
If this doesn’t happen within the next few years, it’s a cause for some concern
11/Reason 7: Institutions gain control of Cardano
Whether it’s huge financial players taking a dominant ADA stake, or outright buying critical Cardano infrastructure, it’s not good news
Since we’re not their shareholders, we’re seen as disposable and exploitable resources
Whether it’s huge financial players taking a dominant ADA stake, or outright buying critical Cardano infrastructure, it’s not good news
Since we’re not their shareholders, we’re seen as disposable and exploitable resources
12/Reason 8: Something better appears
In a space as fast-moving as crypto, there may be something that is objectively better and more exciting than Cardano
Cardano's code and research are open source after all, and thus competitors can learn lessons without incurring great cost
In a space as fast-moving as crypto, there may be something that is objectively better and more exciting than Cardano
Cardano's code and research are open source after all, and thus competitors can learn lessons without incurring great cost
13/ Reason 9: Regulatory and tax landscape makes it impossible to hold
I won’t risk jail or incur tremendous costs when dealing with my investments. So while perhaps the protocols would survive, I’ll take the coward’s way out and not have to deal with severe punishments.
I won’t risk jail or incur tremendous costs when dealing with my investments. So while perhaps the protocols would survive, I’ll take the coward’s way out and not have to deal with severe punishments.
14/ Reason 10: I hit my price targets
I might not sell everything, but if 2/3 of my portfolio can produce a high enough dividend yield when put into a boring broad stock market index to be able to support me, I’ll sell 66% of my portfolio, and leave the other third riding on ADA
I might not sell everything, but if 2/3 of my portfolio can produce a high enough dividend yield when put into a boring broad stock market index to be able to support me, I’ll sell 66% of my portfolio, and leave the other third riding on ADA
15/Taking Profits
I don’t believe in bagholding to the moon. If you’ve hit your targets, take profits, even if we’ve barely left the stratosphere
Remember crypto is VERY speculative
Index funds will protect your wealth, and give an expected yearly ROI of 8% with 3% dividends
I don’t believe in bagholding to the moon. If you’ve hit your targets, take profits, even if we’ve barely left the stratosphere
Remember crypto is VERY speculative
Index funds will protect your wealth, and give an expected yearly ROI of 8% with 3% dividends
16/Conclusion
Cardano is an investment, not a religion. I’m willing to sell if there’s enough cause to do so
Don’t let others pressure you into keeping something you’re no longer comfortable with. But don’t sell in the face of every bad news
Know the worth of your investments!
Cardano is an investment, not a religion. I’m willing to sell if there’s enough cause to do so
Don’t let others pressure you into keeping something you’re no longer comfortable with. But don’t sell in the face of every bad news
Know the worth of your investments!
17/Addendum
To borrow a phrase by the Poet John Keats, these investment rules are “writ in water.”
There may be mitigating circumstances if/when these circumstances occur, but they will serve as major red flags for me to consider whether I ought to finally sell.
To borrow a phrase by the Poet John Keats, these investment rules are “writ in water.”
There may be mitigating circumstances if/when these circumstances occur, but they will serve as major red flags for me to consider whether I ought to finally sell.
18/Shilling
If you liked this, please consider giving a follow. I write one large thread a week, which looks at crypto from a completely different POV
I then convert these threads to full-blown articles with greater depth and evidence on Medium
medium.com/@flantoshi
If you liked this, please consider giving a follow. I write one large thread a week, which looks at crypto from a completely different POV
I then convert these threads to full-blown articles with greater depth and evidence on Medium
medium.com/@flantoshi
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