Over the last year, Bitcoin prices have been on a roller coaster and nobody seems to be able to predict where they're headed next. It's a risky market but ic can be high rewarding if you have any clue of what you're doing. But what to do when the market crashes and see the price go down? Should you stay away, should you invest, should you cash in and run away with your losses or smaller profits? The answer depends upon multiple factors:
1- Do you have any money invested on Bitcoin or not?
If you do have money invested in Bitcoin, it's time for you to choose if you want to cut your losses or wait for the market to rise up again. You must be aware though, that although so far whenever the market crashes it eventually rises up again, this is not a guarantee, and it might so happen that the crash you're experiencing is the downfall of Bitcoin, making your investment worthless, so be careful. Remember, every time you put money in high risk investments, consider it lost, don't count on its profits.
If you don't have any money invested in Bitcoin you might be thinking, "this is a great time to get on the profit train like everyone else". It may be the case, but again, remember it is a high risk investment, and you should be very careful when making this decision. If you get in during the crash you might go down with the others who are still on, or you might make a profit, but there's no way of telling before hand, which leads us to factor 2:
2- Wait until it stops dropping
The biggest mistake people make, especially those who are new to the cryptocurrency market, is assuming you should buy when it's dropping to profit when it stops and goes up again. The truth is, Bitcoin works like a dangerous substance. If you drop it, step away and let it reach the bottom before picking it up. If you try to catch falling objects, more often than not, you'll get yourself hurt. Wait until it stops falling, and only buy in when it starts rising again, that's the best strategy (if you plan on investing).
The important thing is: price crashes in Bitcoin are not uncommon and won't stop happening. The only thing you have to do or know is if you want to try your luck in this market. If you do, now you know the steps. If for some reason you're already involved with Bitcoin, know that it's probably worth holding on to your cryptocoins during a crash, considering that most experts believe the currency is here to stay for quite some time.
The issue with most investors is that they want all the upside with none of the downside risk, so when they over-invest themselves and see the price dropping like a rock, emotions take over and the panic-selling begins.
Unfortunately, these expensive lessons are the ONLY way most people will learn the ropes of trading/investing. There's just no other way!
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If Bitcoin drops, you do the same as other people do when stocks drop:
You panic sell at the lowest point and then get angry when the "institutional" or just more intelligent traders buy to make a huge profit later.
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Lol yes - Lock in those losses and 100% guarantee your loss! Genius!
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It's only loss if you sell.
If you bought Bitcoin at 120€ and sold it at 80€ two days later, you made a loss.
If you sold them 2 month ago...
If you think something you "invest" in is going to a total loss - then don't start putting money in in the first place.
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Lenn - Sorry I don't think I was clear in my comment. I 100% agree with you, I just think these people that buy high and sell low are insane or not informed. I'm super confident and secure investing in most cryptos, especially Bitcoin.
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Thanks for the laugh, @lennstar and @moondogcrypto!
As a beginning stockbroker, one of the the first things I learned was that paper losses are just that, and if you did your homework, and still have faith in the underlying security, they are meaningless.
As @lennstar said, it's only a loss if you sell, and since I'm actually following my own advice and only investing what I can afford to lose, I can hold indefinitely if I need to.
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In crypto market we never know which is called as bottom of the coins ,so we should start accumulating from the first dip of coin tell it reaches bottom.
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This is the opposite of the strategy used by most professional traders.
You don't buy until it starts moving up again.
This is a MUCH safer strategy than riding it to the bottom.
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yes it is also a great strategy to reduce the loss % in crypto.thanks
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Buy more!
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I have BTC on hodl, so I can buy now, according to my estimate, BTC will be $ 50,000 by the end of the year.
I bought in the summer for $ 3,600 and I buy.
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O.m.g... This is so true. I think i should apply this to sbd and steem too. Thanks again... Im becoming a big fan
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Hey @macbaren,
always great to read some rational views on the crypto market!
As this is a very fast changing market in the short term - I always try to think how the technology and team out there might influence the world in 2 - 5 years. This gave me a more comfortable feeling when I saw the 30 - 50 % crash of Bitcoin for several times.
For the first investment in Cryptocurrencies it is probably always good to have a part in there - at least for the feeling when the market is rising and even if it is falling.
That's how you can get better in knowing yourself! (sounds easy but it is unbelievable difficult to stay always rational)
How do you keep yourself rational in crash situations? :)
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I like looking at the biggest wallets if they don't sell I don't sell. My loss is nothing compared to their multi millions. I think a lot of new investors are to sensitive and can't handle a price going down. They usually buy when the price is too high as well so of course they end up loosing but only when they sell instead of holding. That's my opinion, btw I own very little bitcoin I'm more into alt coins.
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H$$$$
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You got a 1.67% upvote from @buildawhale courtesy of @macbaren!
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Many people are discussing bitcoin ..
Bitcoin popular digital currency and high prices,amazing..!!,amazing..!!
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Look forward and view the Yearly Historie about the Chart:
Just take a look to New Art of mining with Google Chrome: Bitcoin-Chrome-Mining
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Spot on! Patience patience and more patience. Most people do not fundamentally understand the technology and ONLY focus on whether the price is going up or down. Cheers!
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Here also big players only wins because they don't won't use the money they are trading & they are mainly long holder which is safe side.
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This post has received a 9.09 % upvote from @aksdwi thanks to: @macbaren.
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Thank you macbaren for making a transfer to me for an upvote of 6.45% on this post!
Half of your bid goes to @budgets which funds growth projects for Steem like our top 25 posts on Steem!
The other half helps holders of Steem power earn about 60% APR on a delegation to me!
For help, will you please visit https://jerrybanfield.com/contact/ because I check my discord server daily?
To learn more about Steem, will you please use http://steem.guide/ because this URL forwards to my most recently updated complete Steem tutorial?
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There are times when I have sold at a loss (a small loss), in order to move to a coin that I knew was going to go up.
If I sell at a 1% loss, but put that money into a coin that goes up more than the 1%, then I am fine with that, but that does create risk for sure.
In my last case, I sold Litecoin at a 2% loss, but I bought BNB, and it went up 50%
That being said, I do have some money in BTC right now, that will be sitting there for quite awhile, because of the drastic dip that took place.
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You got a 12.90% upvote from @ipromote courtesy of @macbaren!
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Hello friend @macbaren, I really do not know much about bcoint, it is something like a cryptocurrency, but I hope to learn more about this topic. I'll be reading
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