On my last couple of articles I’ve taken the discussion away from price and volume, as I wanted to focus on the underlying bitcoin infrastructure and governance model, as well as on the technology developments that will push adoption.
However, it is equally important to understand how to behave during down-cycles and how to treat the fuel that drives cryptocurrency.
How to ride a bear-market
–this article shouldn’t be taken as financial advisement as it represents my personal opinion and views. I have savings invested in cryptocurrency so take whatever I write with a grain of salt. Do not invest what you cannot afford to lose and always read as much as possible about a project before investing. Never forget: with great power, comes great responsibility. Being your own bank means you’re always responsible for your own money—
If you look at the 1 year evolution of Bitcoin’s price, from July 2017 to 2018, what is see is that it grew 3x. This is, if you had invested in 1 btc it would now be worth around 3 times more.
Now, does history predict future prices? Obviously not.
But it can tell us a really interesting story. For one, will this bear market have a long-term influence on the price of bitcoin? Is the cryptocurrency market capable of recovering?
If you remember the words of expert traders and investors you should always buy when there’s fear, sell when there’s hype; during the last 6 months what I see is an amazing opportunity to snatch some bitcoin (or any other cryptocurrency for that matter), at a really discount price.
It’s like bitcoin has been on sale for the past couple of months, before the release of a newer, upgraded, cooler version of the software. Would you sell if you knew in a year or two the asset you bought could be worth 3x more?
The certainty of uncertainty
The reason so many people invest in bitcoin is due to its volatility. Without it, there would be a lower chance for agents making epic gains. Whoever is patient and has the cojones to not sell during extensive bear markets, will eventually take home a butt load of profits. This is what price history tells us: what eventually comes up must come down; except the opposite also happens.
Looking at the table above we can see many great opportunities to enter the market. I really don’t know that many assets that can crash more than 80% and then recover. 2 years after! It’s insane how speculative the bitcoin market is, but that is also a key factor to bring more people into the cryto-world.
What if this is the only time ever the market won’t recover?
What if i lost all my money?
My advise is to stop going in circles. Literally.
The point is: ride the waves and don’t fight them.
If you don’t you’ll drown. Figuratively speaking.
Unless you have the money to move mountains (on this specific case the mountain being the price), it’s futile to worry too much what about you can do. The way I see it, this is a very simple binary game. You either win or lose by selling or buying. The options are quite simple indeed, what matters is timing.