Lessons from the past - what to do with the current bitcoin slump
While I am writing this, the bitcoin price is down 25% in a day, making it the 7th worst daily loss since mid 2010.
Coming from a new alltime high just a few days ago with lots of new investor having jumped on the band waggon recently, a lot of people are likely to feel a lot of pain right now, asking themselves what to do.
While I will not give you any advice what to do as this will be largely dependant on everybody's own personal and financial situation, let's put things in a historical perspective.
As said, the slump today is the 7th worst in 7 years.
If you would have invested at any of the days which had been worst than today, you would have earned on average: 28% - you could thus interpret this as a sign that chances for a short term recovery are good.
If you would have invested at each of the 6 days worse than today and held for exactly 50 days, you would have on average made 52%. This is however worse than the average 50 day return of 83% since 2010. This is due to the fact that historically such a steep downturn came with more trouble later on.
This becomes also visible when looking at the 100 return for these 6 miserable days. This was on average 70% vs 233% on an average day since 2010.
I will thus not buy yet but wait for prices coming down more.
Please do your own research.