Since November, we have been witnessing a constant decline in the value of Bitcoin. This decline has turned into a plummet in the last month, bringing some Bitcoin investors to panic and sell their assets short. This feeling can be understood, considering the fact that the value of Bitcoin at the time of writing this blog post is about a third of what it was in November. Naturally, this situation raises some questions and doubts about investing in Bitcoin. What can investors do about this current slump?
I am Ofir Bar, an entrepreneur with over two decades of experience in the investing world. The recent plunge in the value of the Bitcoin market is very relevant to me since I’m involved in it as well. For this reason, I decided to share my thoughts and insights about the current events in this market.
A great time for re-assessment
This plunge in the value of Bitcoin is a poor period of time for the most potent digital token we’ve ever witnessed. Its decline causes other digital currencies to go downhill as well, and this trend has taught me a lot about how to wisely handle times of market turmoil. Allow me to share my perspective on the recent events in the crypto market. It might as well help you to navigate its currently stormy waters.
- This is what we came for – First of all, it’s important that you remember you joined the crypto market knowing that it’s highly volatile. Trading cryptocurrencies holds both high risk and high potential, and that’s well known. Choosing to trade this market is actually saying that you are willing to face the risks this market holds since this high risk also means a higher potential for a bigger profit.
- Don’t panic – I know you might be irritated by this one, but it is too important to omit: Don’t panic! Like in every other aspect of life, making decisions and acting when feeling pushed to the corner usually results in making the worst choices possible. It’s natural that you ponder your possibilities right now, but keep in mind that you might not be seeing the bigger picture. For this reason, I advise you to try to look at your crypto trading life from a bird’s eye view. Ask yourself – why are you trading Bitcoin? Is it because you are trying to make a hit-and-run profit? Or are you there for the long run, planting the seeds and expecting future growth? After figuring out your answer, I believe you’ll have a much more profound feeling of what you should do next.
- Noise filtering – Due to the fact that Bitcoin, like all cryptos, doesn’t create any cash flow, it’s much more sensitive to investors’ sentiment than other tradable assets. This means unfounded rumors might affect the price of Bitcoin harshly. Try to figure out whether what caused Bitcoin to drop is based on actual changes in the market, or if it was caused solely by rumors, sentiment, and panic. This crisis is a great opportunity to learn how to filter out the ‘noises’ you constantly hear – irrelevant or insignificant news that might sound troublesome. Try to catch up with market news not more than once a day. Consuming market news in a more subtle way will only help you see the bigger picture.
Know your weaknesses
Having figured out the steps mentioned above, I believe that now you possess the tools to choose wisely what will be your next step in the crypto and Bitcoin markets. You’ll be able to determine whether the risks are real, or actually might bring some new opportunities to you. Investing isn’t for everyone, specifically trading cryptos. Conducting wisely in this world requires great self-awareness, knowing your weaknesses, and a deep understanding of human psychology. I believe that the crypto market, and especially the Bitcoin market, will continue to hold many opportunities for the hungry and patient investor. For this reason, I advise you to never lose hope and learn from your and others’ mistakes.
