Home Community Crypto, Trading, Investing, and Technology Chronic underperformance… Reply To: Chronic underperformance…


Hi Dom-

I can provide some insights into why people would trade in a market like this.

As a bit of context, I personally have two account types:
1. A buy-and-hold account
2. A trading account

Here’s why-

Yes, if you believe BTC will hit 100K next year, then it’s probably best to buy and hold. It will be near impossible for any bot to outperform a full bull run.

That said, the challenges with buy-and-hold are several:

– 2020 buy and hold has been amazing, but did you buy all in on Jan 1 (or during the COVID drop)?
– When do you realize your gains?
– Now that we’re sitting at 27K, do you buy in? Or are we potentially at the peak?
– If the market does drop (remember it was as low as 3K this year), what do you do?
– If some regulatory or security issue hits and BTC appears to permanently drop, what do you do?
– If it keeps going up, do you buy more? Or is it too late?

The point is, in the midst of a bull run, it’s easy to say buy-and-hold has outperformed. But that’s looking backward.

Markets typically ebb and flow. They experience both bull and bear cycles. So it’s also not a good assumption to say the market will just keep going–it may, but odds are not in that favor.

When it comes to trading, here are the advantages over buy-and-hold (even in bull markets):

– You can trade regardless of price. It doesn’t matter if BTC is $3K or $27K. You can move in and out without worrying if it’s too late.
– If there are bull and bear cycles, you can win over time. Crypto-ML has been good at capturing a portion of bull runs and avoiding most of bear times. As a result, we beat buy-and-hold in the long term.
– With a highly bullish asset, trades should be solid and provide a relatively safe (albeit speculative) way of consistently building your portfolio over time. If the market crashes, you won’t lose all of your gains.

I hope that helps provide some context and why people trade.