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“Bear markets abandon diligent investors,” says analyst

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Key facts:
  • Melker believes bear markets leave more transparency within the market.

  • On the other hand, according to Melker, “unwary investors abandon bear markets.”

In a rather turbulent year for Bitcoin and the entire cryptocurrency market, market analyst Scott Melker reflects on the positive things this bear market has left behind. Among the positives to keep in mind, he points out a type of investor he calls diligent, which will allow for a more robust ecosystem to be built.

This reflection was published by Melker in his last newsletter of Dec. 5. The analyst quotes the famous line from the book “The End” by writer G. Michael Hopf “Hard times create strong men.” Strong men create good times. Good times create weak men. Weak men create hard times.”

Paraphrasing Hopf’s quote, Melker notes that bull markets, such as the one we will experience between 2020 and 2021, create “complacent investors” whose actions end up generating financial junctures such as the current ones. In contrast, the tough decisions that must be made in a bear market and the courage that must be cultivated to survive end up forming resilient investors in the face of adversity.

Bear markets create diligent investors. Diligent investors create bull markets. Bullish markets create careless investors. Careless investors create bear markets.

Scott Melker.

Celsius, Voyager, Luna, 3AC, FTX, BlockFi, and Gensis are cited by Melker as “careless investors” who dragged the cryptocurrency market to its current state. Where bitcoin has fallen more than 70 percent. Of its all-time high reached in November last year.

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Who are the “diligent investors”?

For Melker, all those who “survived without losing everything” can be considered diligent. However, he points out that in this still bear market, other “careless investors” are likely to be found along the way.

Any “diligent investor” who believes in these difficult times must establish the right investment strategies, whatever they may be, but which will help him or her withstand the bear market. In this case, Melker believes that many investors are waiting for “the smoke to clear.” to make it clear that they are already in a bull market..

This is not the first time “hard times” have hit the market. In 2018, the ICO collapsehas left many on the street. However, some have emerged unscathed and are still standing, as in the case of EOS. As Melker rightly mentions, in this market it is not the cryptocurrencies but the ecosystem companies that are eliminated from the industry for being “unwary investors,” being FTX greatest example.

It seems that it is not just “diligent investors,” but investors who gain more experience and will leave this market. That, after all, may be profitable for bitcoin and cryptocurrencies.

For the time being, the “careless investors create bear markets” phase is not over. Companies are still on the edge dragged by the FTX case so it is possible for more failures to occur within the ecosystem..

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