Okay, let's talk about Riot Platforms. Or perhaps because they just dumped nearly $39 million worth of Bitcoin. Now the crypto bros must be sweating! Is this the beginning of the end? Probably not. It definitely ought to give you pause about your “Bitcoin to the moon” plan.
Halving Hurt. Miners Are Feeling It
The Bitcoin halving event happened. Block rewards are slashed. Mining difficulty? Skyrocketing. It’s becoming more difficult and costly to mine Bitcoin. Riot's excuse? Funding growth, reducing reliance on equity financing. Translation? We need cash now, and Bitcoin just isn’t doing it in the meantime.
Look, I get it. The allure of quick riches is strong. You notice Bitcoin’s price has risen 47% in the past year and decide, “This is easy money! That’s the trap. That's the FOMO talking. You're not thinking about the real cost. You’re not imagining the coal miners who can’t make ends meet. And you surely aren’t considering how things will play out when one of the big hitters like Riot begins to sell off their stash.
Don't be naive. These companies aren’t keeping Bitcoin because they’re believers in decentralized money. They're holding it to profit. And when that profit dries up, they bail. Just like Riot did.
From HODL to "Holy Crap, Sell!"
Remember the "HODL" mantra? Hold On for Dear Life! Now, it's more like "Holy Crap, Sell!" It's easy to preach diamond hands when the market's booming. What happens when the tide turns? What does it mean when the halving comes, mining becomes more difficult, and all the whales begin to dump?
This isn't financial advice, but seriously, consider this: those meme coins and leveraged Bitcoin positions might look good on Reddit, but they're gambles, not investments. Diversify. Understand the risks. So, don’t put all your eggs in the crypto basket! Things are looking pretty shaky at the moment.
Bitcoin may not be the ticket to fortune we all once believed. It's not a get-rich-quick scheme. We look at it as a new volatile class of asset, with very real risks involved particularly for the everyday retail investor. It’s the space of rock-bottom consumer protections. To put it simply, consumer protections are nearly absent in the crypto world. You know that one politician who got totally busted in an obvious lie about accepting illegal campaign contributions. That’s crypto in a nutshell, but with a lot more memes.
Wake Up! It's Not A Guarantee
Riot’s impending fire sale isn’t only bad for one company’s balance sheet. It's a sign of the times. It's a wake-up call. Even the largest players in the game can be left holding the proverbial bag—and it’s a hard reminder. So, before you throw your life savings into Bitcoin, ask yourself: are you prepared to lose it all?
If the answer is no, then perhaps it’s worth considering a different approach. Perhaps it’s time to stop making halfhearted, ill-advised attempts at a seat-of-the-pants new norm. Perhaps now is the moment to turn off the hype and tune into your own reason.
The dreamy “moon” might be just a mere illusion. You certainly don’t want to crash and burn on your way to achieving this aspiration.
Because the "moon" might just be a mirage, and you don't want to crash and burn on the way there.
