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Predicting vs Observing

Are you a market predictor or observer? Starting out, many of us would like to be seen as market predictors. But for most of us, as we mature and grow in the market, it soon becomes clear that we’re bad at predicting the future. We realise that the market is the ultimate referee. So, it makes sense to look at what the market is doing and react in response.

Someone may say that Bitcoin isn’t valuable. But how can that person argue with the fact that it is a trillion-dollar asset, and that there are hundreds of millions of people around the world holding it? Ultimately no one’s individual opinion matters. The only opinion that matters is the collective opinion of the market. The market itself has determined that Bitcoin is in fact valuable.

Predicting vs Observing

So, what is the difference between predicting vs observing? A market predictor predicts that something will happen and therefore aligns their investment decision based on that. But a market observer looks at what the market is doing at that moment and reacts in response. If something else starts happening, they will again adjust their strategy in response.

Observing the market grounds our decisions in humility. We cannot know what will happen in the future but we can look to market trends and indicators. As market observers, we may consider whether the team behind a project is intelligent, whether they think from first principles, whether or not they know how to solve problems and whether or not the project has traction.

Disclaimer: THIS IS NOT FINANCIAL NOR INVESTMENT ADVICE. Only you are responsible for any capital-related decisions you make, and only you are accountable for the results.

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