Volatility Is A Part Of Crypto: Get Use To It
(Edited)
Bitcoin ran up and then dropped hard. Then it started to run up again.
This rollercoaster can drive newer people crazy. It is also something that people just need to get accustomed to.
In this video I discuss how having a longer horizon in crypto is very helpful. We are now at the stage where bigger players are entering. This could drive things a bit nutty. Regardless, if one is looking at 3-4 years down the road, the moves we see now are not crucial.
If long term optimistic, the rule of thumb is to buy the dip. Not financial advice but a move many long term investors use to add to their holdings when volatility is there.
▶️ 3Speak
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I wonder if the biggest reason for this volatility is the liquidity in the market. Thus once the sellers or buyers start dwindling on one side, one side takes control and because the lack of buyers/sellers, they push it far in one direction. In the crypto markets, we don't exactly have market makers so it tends to swing in both directions really far.
Although long term, bitcoin will rise because the amount of bitcoin is limited and some have been lost or stored away.
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That could well be the case. Liquidity certainly impacts markets. So does market size and crypto is still very small overall so it is prone to higher bouts of volatility.
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Completely agree, this is a long game. I think, this time the situation is different and even if we face another bearish market, the prices of Bitcoin will not go too much down, new big fish involvement in Bitcoin et cetera could be the reason not to go down too much.
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I agree there certainly is a floor in with the bigger players now entering.
I do not think you see sub $10K again..possibly not sub $20K.
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I couldn't agree more.
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The volatility is something everybody new to crypto has to get used to first.
I gifted some BTC to two of my friends for Christmas and tried to educate them a bit on the matter. Fun enough, they were going full FOMO within days and I had to convince them a long time that there is no now or never-situation going on.
Still, volatility will probably get lower over time the more institutional money gets into the market. It might still take years to see the effect, though.
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The entire crypto market needs to grow a great deal to reduce the volatility. We need to triple in size before I think it settles down.
That is a lot of money that needs to be generated but, hey, we can create our own.
Get another couple hundred million people involved from around the world and you will see a different situation.
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Yeah people should not go in with the expectation that crypto and stocks have the same behaviours. I also agree that the price of BTC is going to be higher in 5 years if something drastic happens, like goverments try to take it down.
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My supposition is that is governments tried to take it down, it would only make it even more desired.
Besides, there is no way all governments are going to agree about crypto.
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True.
Also, I don't totally understand why Western governments would want to even kill crypto. The crypto phenomenon is a great source of tax revenue. If fiat is to fail, it will do so completely on its own accord regardless of what crypto does. Crypto being used for crime is mostly just a talking point. Whatever criminality crypto is used for is dwarfed by what off-shore accounts, shell companies, tax havens and even regular banks are used for. Large banks get caught and are fined for enabling money laundering left, right and center.
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That is all true but it comes down to control. That is the idea behind CBDCs. It isn't the central banks that are most interested but the governments. Then they can access any account and take their taxes. It also gives them the power to instantly close accounts.
If crypto is a threat to their power, that is what they are concerned about. Taxing crypto is a nice bonus but they really dont care since they will run up whatever deficits they have to without a second thought.
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Fearful people should put this into perspective: 21 million coins for the entire world population. Truthfully people should just “own” Bitcoin and not “trade” it. A nice insurance policy for the rainy days ahead.
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That is a smart approach.
If nothing else, they wont be making more (than what is slated).
Get involved while you can.
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This is why I just hodl.
Honestly I hardly look at my blockfolio at all these days - other than to update when i buy or sell something, which isn't often.
Back in 2017 i was constantly refreshing, but not this time around...
So up to $40K - it mostly felt unreal, but more than that it past me by, down to $30K, it wasn't great, but I didn't think about it too much either.
And if people don't like the volatile nature of the BTC price maybe they should try a stable coin like Hive!
I kind of wish that wasn't a joke.
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Short time frame trading in crypto is for pros or gamblers about to lose their coins. What those of us not well versed in TA should do is to follow the Bitcoin rainbow chart. Sell or buy the colors. So long as Bitcoin does what it has been doing for the last decade or so, you can't really lose by buying the lower colors and selling the higher ones.
https://www.blockchaincenter.net/bitcoin-rainbow-chart/
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Very hard to break away from this if one is living in scarcity.
Abundance trumps volatility.
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Yep.
Bitcoin is one of the Worlds most exciting Rollercoaster and where it goes, the Altcoins follow. Good point about taking the Longview.
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@taskmaster4450le, Concept is simple:
Human emotions are volatile so everything is volatile.
Have a wonderful time ahead and stay blessed.
The crypto rollercoaster can be fun once you get used to it :) and more importantly it can be profitable if you know what you are doing
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Summary:
In this video, Task discusses the recent volatility in the crypto markets, particularly focusing on Bitcoin's significant price drop and its impact on the entire market. Task emphasizes that extreme volatility is common in the crypto space and recommends having a long-term perspective when investing in cryptocurrencies like Bitcoin, Litecoin, and Ethereum. He suggests buying the dip as a sound strategy but also warns against getting emotional or panicking during market fluctuations. Task believes that the recent market downturn may be due to miners cashing out, but he remains optimistic about the future of Bitcoin and the possibility of a market recovery.
Detailed Article:
Task begins the video by addressing the recent volatility in the cryptocurrency markets, highlighting Bitcoin's price drop from a high of around 42,000. He points out that such fluctuations are not uncommon in crypto, especially with Bitcoin, which can experience drops of 30% - 40% followed by rebounds. Task advises that for those new to crypto, it's essential to get accustomed to this kind of volatility and recommends adopting longer timeframes for investments to help navigate through market swings.
He compares the traditional stock market's 10% drop being a cause for concern to the cryptocurrency market, where such fluctuations are considered routine. Task stresses that for those looking at the price of Bitcoin or other top cryptocurrencies like Litecoin and Ethereum five years down the line, current market movements should be viewed with less significance.
Task discusses the strategy of "buying the dip," noting its historical success but also warns about the risks involved, especially during market crashes. He suggests having clear exit points based on individual timelines and investment goals. He mentions the effectiveness of dollar-cost averaging with Bitcoin, enabling investors to benefit from price declines by purchasing incrementally while avoiding trying to time the market.
Expressing his lack of concern regarding the market downturn, Task speculates that the recent drop may be due to miners selling off their holdings for profit, flooding the market temporarily. He reassures viewers that institutions are likely to absorb the available supply, contributing to a potential market recovery. Task acknowledges the various possible scenarios for Bitcoin's price movement, including the likelihood of retesting previous highs before potential further declines.
In conclusion, Task emphasizes that volatility is inherent to cryptocurrencies, making them attractive to traders but potentially challenging for those averse to market fluctuations. He encourages viewers to maintain a rational and non-emotional approach to investing in crypto and suggests that volatility, while a natural part of the market, should not deter long-term investors from cryptocurrency participation.