Crypto is down today. While it is not fun, this is normal.
When crypto takes a dive like this, many weak hands sell and dump their coin. Stop loss orders auto-hit, people panic, and the list goes on with people cashing out.
After reviewing my past experiences in crypto, these dives generally do not phase me too much. If I lose 50% of my holdings in the next month, I consider that normal for crypto. The reason I am willing to hold through such fast flash-dives is that the upside at the other end of every crash in crypto is so much larger than the loss.
A great example that happened to me this year was when I rode DASH from $100 back down to $50 within a few weeks. I was laughing the whole way down because I know the long-term value of Dash. Then I rode the roller coaster back up to $200 and today around $150.
I am not sure bitcoin will make it much below $2k this time, but the altcoins are taking a beating. Yet, the upside on many altcoins is greater than the gains bitcoin will ever see!!!
How are you riding out the declines?
Tips for people who panic during declines:
Focus on the potential underlying the technological advancement and adoption your coin has, because this is ultimately what drives its value long-term, so you will not feel crazy for holding in declines when fear says sell sell sell
Remember all the other dives, or if you do not have that experience, look at old charts of previous dives, and then look what happened after those
Some people walk away and forget about it, but that is only good to a point, you still want to be engaged with reviewing the fundamentals of your coin to make sure a good investment is still a good investment
Weak Hands? I really dislike that reference. Another one is you don't lose any money until you sell. Sometimes you have to know when to hold em and know when to fold em. There is another term that I haven't heard much of lately but I think there is a good chance it won't be too long until I do. That's bag holder. I had very strong hands when I rode LEH all the way down to zero back in 2008. I'm not saying crypto will be the same but just because someone sells or decides to try and take a controlled loss does not make them weak. I do enjoy watching your videos on youtube and reading your posts. Please keep making them:)
If someone doesn't understand why crypto is good and has no fundemental investing reasons for holding crypto then what you're saying is right... either that person is a trader, or they are just someone throwing money at something you don't understand.
Market cap of world currencies? Trillions. Currencies and bank reserves exchange in the trillions. That's what I mean. And you should never have 100% holdings in 1 coin. I could ride one of my coins to zero, but I'll still have plenty in others.
Fantastic advice. Newcomers are going crazy right now. And that would have been me a few months back. But getting through the bloodbath and coming to the other side . . . that is where the gains are.
This type of growth was just flat out not sustainable. The public was buying all these coins after hundreds of percent in gains. Sadly, this is typical of all markets.
Guys, just be like Ash in one of my favorite movie series of all time and just . .
Great read
Very sound, sage advice. The pullbacks are where the savvy investors make their money. I always look at it like a sale. When cereal goes on sale at the grocery store, you pick up a few more boxes to save/make money in the future. The great thing about buying an asset on sale though is you can reap those rewards for much longer and a more meaningful way. Great post as usual!
You may wonder why price goes down so drastically and fast in all the exchanges like a coordinated action. You're right. It most probably is coordinated. 100billion market could easily be swayed by some fund. A sign or some jargon over a dinner would kick start the whole thing. There are many tricks at hands to move the market as with the stock market. AMZN has gone up more than 100 times its introduction price but few have kept it all the way up. People are easily rocked and cash out due to market tricks. Such huge sway is just a sign of institutional entrance which want grab the coins in your hand. A coin may have been traded many times in a session to drag down the price. So Keep your coins in your Wallet so nobody could use them to dump its value/price. This is always my recommendation to all bitcion holders. This is the best way to preserve its value. Download a good wallet, store the coins in it and put the hard disk in a safe. Remember there are just 21million coins. It's really an scars asset.
Good points you make!
Perhaps we just learn by theses huge swings and if the next high hits, we switch some of our profits in Fiat and sit it out for the next attack to profit from it.
The question is only when and not to enter too early.
Otherwise longterm hodling or better investments in quality coins (Dash, Steem, Sia, Waves, Iconomi, Ripple and probably Tezos) is a good strategy as well.
I'm sure everyone who holds bitcoin has gone through a few 50% drops. No big deal it always recovers.
Completely normal for me to be buying up big during this period :)
Im not afraid coz after every weekend there is a fall of the price coz of the weekend u can trade only with cryptocurrencies.
The second reasson i think is coz of the summer ,every one need money to go to vacation and they are seliing .
So im not just holding i'm buying :)
From my limited experience and a paltry $9000 that i've invested between btc and ether in the last 3, almost 4, weeks, i am really leaning on what i THINK will happen leading to the fork. People will get scared, heck, they're already scared. Blood everywhere! I'm buying ether right now(earlier when it was 230) but i'm wanting another btc. I GOTTA believe i haven't seen the real panic rush. That if others don't pick up the slack then btc WILL drop below 2,000 within 2 to 4 weeks. I personally think it'll go further down.
I'm still keeping my chin up, i've read enough to know that this may be one of the most volatile times across the board but btc is something that can be banked on. Perhaps the only 100% surefire stock.
Its what happens on a regular basis, the main problem is that SO many people panic sell, and it causes them to lose so much money in the process. most of the people who panic sell also forget to check the prices and then rebuy into the market to make a proper profit