My favorite chart of bitcoin...
"Bitcoin is crashing, it's over, it's never going to go up again, everyone needs to sell!"
How many times have we heard this?
To be honest, too many to count.
This is a little embarrassing to admit but...
I will admit I was one of those people who thought just that back in 2012.
At the time, I couldn't believe that people were actually paying money for bitcoin, I thought it was something basically useless and something that would be gone within a few years.
However, those were also the same thoughts I had about it back in 2010 when I first heard about it.
Why I still thought that 2 years later when it was still around and making new highs is beyond me. I basically already had the proof I needed that bitcoin wasn't going anywhere.
When bitcoin crashed in 2012, I said to some of my trader buddies:
"Ah ha! See I knew this was useless, worthless, and good for nothing."
However, after that crash, the resulting price action looked more like that chart above than something that was ready to disappear...
I was forced to eat my words and watch bitcoin go on to make new high after new high until I finally put some skin the game around the $1800 level.
The rest is history.
Now that we have seen similar price action yet again, what should we expect in the future?
There is something to be said about "the past not guaranteeing future results", yes yes I get all of that.
However, what about the saying; "this time is different"?
That is one of the most dangerous and costly phrases ever uttered in finance.
Looking back over the history of bitcoin, every single time bitcoin has had a large crash it has gone on to eventually make new highs.
Every single time.
To expect otherwise, would be akin to saying "yea but this time is different".
It very well might be different this time, but when we have history that expands about 8 years and a trend on our side, I will stick with the trend every single time over "this time is different".
So that means, if you ask me what do I expect to happen from here?
I will say..
"I would expect the same thing to happen every other time bitcoin corrected. It went on to eventually make new highs."
For that reason, I was a buyer of bitcoin yesterday at $10k and I will be a buyer again if it drops back down to or below that level.
Stay informed my friends.
Follow me: @jrcornel