Understanding Business Advancement Cycles For Investing

It's important to understand how businesses work and operate along with tech and just about everything else in the world when it comes to tech, adoption and investments. It moves through cycles which many call your bear market and your bull market. But there's far more to just the ups and downs there's real reasons why those moves are happening and understanding it is critical not only to investing but also doing your research towards other businesses.

The Hype Cycle

Whenever a new tech comes out everyone gets hyped about it and buys in heavily. This is your FOMO phase and its what triggers massive crypto rallies and also stupid high prices and sell outs of iphones for example.

These hype cycles normally only last a few months and after that holds it's ground for a period of time about a year before it starts to trail downwards. This is normally the slow time between the new product and development on the next version. This leads into sell offs for the crypto markets and a low volume which hampers what we now know as defi platforms.

It's why in a way I feel DeFi platforms should have a quarterly vote about emission rates of their tokens. When the econcomy and crypto are sluggish and slow most should vote towards reducing the emissions because there's less fees being used and should in theory hold up the price of the native token a bit better. In times of rally a higher emission could be voted on as there's more funds being collected from transactions and thus it wont hurt the native token price much.

The Bear Cycle

This often onsets a few months after a hype cycle the issue here is you don't realize you're in it until 6 months later when you realize not much has been going on with the markets or demand for the product.

In crypto we normally see it move between two price points because volume is low mini rallies and mini sell offs are common place. For example bitcoin moved between 30k and 40k for months with no real moves. This is what is your bear cycle and is subjective to either a massive rally or a massive crash. It's mostly always leading into a massive crash as it's heavily weighted by other things going on. The most recent being the UST and LUNA crash which sent shockwaves into crypto followed up by stocks dumping and inflation numbers.

The Crash

The crash is normally just as fast is not faster than the rally. Lasting just a few months and then leveling out into a bear market or building a base layer to the next rally. For the most part I feel the crash is in for Crypto is over. But it's in that bear territory which means quick ups and downs within two points. With the way things are this could end up being a long bear market but my hopes are that is not the case and things will begin to ramp up again soon

What All Of This Means

As a investor myself it's important to understand these cycles. These cycles apply to everything as they are all interconnected with each other. Stocks, crypto markets and yes projects within both of those. By understanding these cycles you can better pinpoint projects you have been watching for a long time and invest when things are down. Allowing you to gobble up a larger share on the low with greater potential in the long term uptick.

Personally for myself I thought we were in the low on the crypto front months ago. However the UST, LUNA and Inflation along with FUD all at the same time sent crypto into a deeper sell off then I personally expected. For a long term investor for me seems like a pretty solid buy in while everyone else is legit in panic mode. It will most likely be next year or even a year after that before we see another large rally again. But also it could be sooner if something is created and catches on like wildfire much like NFTs did. It could come in the shape of play 2 earn crypto NFT focused games which seem like they will start launching early next year.

*This article is for entertainment purposes only and is not financial advice. Understand the risks before investing yourself.

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