I figured this would be a good time as any to do a blog post. I want to document in real-time what it’s like going through this event so that I’ll be more prepared for future crises and downturn economies.
Corona Virus (COVID19)
As the world already knows, the Coronavirus, formally known as COVID19, has taken a foothold in countries across the world both physically and psychologically. It started out in Wuhan, China and now has spread across the world, most notably, in Korea, Italy, Iran, and the United States. What started out as a spectator sport, has now turned into a global pandemic (WHO – World Health Organization).
Business Halts
The response from the United States as cases of COVID19 started spreading within the United States was slow and generally taken with caution. We were seeing a huge increase in people buying water bottles, toilet paper, sanitizers, and other basic necessities for a possible prolonged quarantine and for fighting against infection, but no outright panic yet.
It wasn’t until the NBA decided to postpone the season and actor Tom Hanks and his wife contracted the virus that fear struck the market. Following suit, large companies began enacting work from home policies. Big events were canceled. It was a ripple effect that gripped the throat of American citizens.
Stock Market Crash
As fear hit the market, the Dow has dropped from 29,669 to 21,200.62 in a matter of a month. I don’t think this is quite the bottom of the market either. Bitcoin also plunged from 10k to about 5.5k in about a month’s time. The scary part is, we don’t know how long this is going to last. The longer economic activity slows down, the more likely we’ll see layoffs. If layoffs happen, we’ll start seeing credit defaults. The cascade effect of the market could lead us into a recession (two-quarters of significant economic decline). Worst yet, we could go into a depression, but I think that’s unlikely.
My assumption is that we’re going to see some rockiness in the market until the U.S. presidential election. With all the economic uncertainty, who will be our next president is becoming murkier. Uncertainty and fear in the market is never a good thing for economic growth. It’s a good thing when you have liquidity.
Black Swan
In a post back in August, 11th 2019, I wrote about the only fears I have about Bitcoin — The Presidential election and a Black Swan event. A Black Swan theory was coined by Nassim Nicholas Taleb and it’s an unpredictable event that has large consequences with a low probability of happening but when it does, it’s pretty bad.
Now that we’re in March 2020, both of my worries are happening. The likelihood of Trump staying in power has slightly diminished with economic uncertainty, and the Black Swan is the COVID19 pandemic.
Bitcoin has dropped precipitously by almost 50% in just under a month. If we break the 5.5k range we’re looking at another drop to probably 3.5k. I don’t think it’ll drop below that since there is strong support.
What’s Next?
OUCH! I just had to erase a part of this block that I just wrote saying that I’m not too worried. Bitcoin just dropped to 4.7k as I was writing this blog…That one hurt and I’m not feeling too comfortable at the moment. I finally sold. I don’t know where the market turns. I’m hoping it goes down to 3k. I have buy bids at 3.5k. Rough…
Yellowstone
I was hoping to get a buyer for the store and buy more Bitcoin. It doesn’t look like that will happen in this market. But the good thing is that water sales have picked up. I was going to hire another employee but I’ll be holding back for now. I need to pay off some loans on the business and reserve cashflow.
Unwage
I’m going to take this time to work on Unwage. I’m not going to worry or think about the market at the moment. I’m keeping my buy orders in and my head down focused on business growth.
Hopefully, the next update will be a better one. Until then…Keep grinding.