Before I begin let me clearly state that Cryptocurrency and Blockchain Technology are here to stay. Regardless of market uptrends or plummets, we are on the cusp of a revolution in technology not seen since the Industrial Revolution. I am not a financial advisor and this is not financial advice.
Now to the news many new additions to the Crypto community might not want to here, especially the bullish August we have seen thus far. At the time of writing this August 28th 2017 at 12:50 pm EST the total market cap is hovering around $158 Billion. Completely uncharted territory and we are seeing new records broken day by day either with individual Crypto market caps to ICOs taking in more money in an hour than Warren Buffet. With all parties, however, there must be a point where the fun ends and its time to get the house back in order.
Midway thru this past July with the impending BTC hardfork we saw the overall market cap dip from $115 Billion on June the 17th to $65 Billion on the 19th of July. We are talking about $50 Billion dollars leaving the market in a span of 4 weeks. A dip of near 46%!!! While to many experienced Crypto investors this was merely a time to take some profits before the dip and buy on the cheap, for newcomers it was the candlestick burning down day by day while they watched their new found gains disappear.
While many are thinking this was a bad thing, think not, this is how markets work. Markets do not simply go parabolic and rise without hesitation. Every time the market has fallen it has risen again to new highs. The question that needs to now be asked is regarding the next upcoming BTC hardfork and Ethereum and the Metropolis forks. Will the market dip again? Will this dip be worse than the last? How can I protect my profits? All of these are great questions that I will handle individually.
Will the Market dip again with the upcoming forks on ETH and BTC?
Yes, in my opinion the market will take a dip. The Crypto market is heavily driven on emotion and any sort of kink in the business as usual machinery of it seems to always cause market disruption.
Will this dip be worse than this past July?
This is probably the most difficult question to answer as knowing the thoughts of another is truly challenging especially when trying to anticipate how an entire community will react. All that can be said is expect a dips.
How can I protect profits?
Large market cap coins tend to do the best at either maintaining and/or recovering from dips. If you are worried about losing profits then do your research and consider moving into something with a high market cap.
Here's what can be learned. Never chase highs, anticipate them. This upcoming dip will be an opportunity to get in on new investments and stock up on more of your favorite long term holds. Thank you for reading.
-CG