Bitcoin, Ethereum and just about every other coin in the cryptocurrency world has taken a tumble this week. I don’t understand some of the hysteria though… I mean… volatile markets are experiencing volatility. What’s the surprise?!
Yes, it’s going to be tough for anyone who put too much of their investment portfolio into crypto and needs short-term funding, but it’s a valuable lesson in investing. You don’t over-stretch your finances, you don’t bank on a bull market continuing and you certainly don’t put a large percentage of your investment portfolio into anything high-risk. Anyone who does that may get lucky from time to time, but overall it shows a lack of patience and a “get rich quick” mentality. Not smart.
But anyway, why the drop? Well, the day of reckoning for Bitcoin SegWit is approaching so volatility was very much expected. I imagine it will probably pass without too much uproar though. I remember when Ethereum hard-forked and there was mass panic… but then the price rocketed up and everyone pretended that they hadn’t been worried all along. Some people just like to have a moan!
You also have to remember that nothing goes up in a straight line. At the beginning of 2017, Ethereum was $10 or so and now it’s somewhere around $200. Sure, it has dropped 50% in the last few weeks, but that was on the back of a 4,000% gain!
You have to look at this stuff in context. Everyone who bought Ethereum at $10 is still massively in profit and I imagine that we will hit new highs before too long. Of course, I have no way of knowing that for sure, but I’m certainly not selling up and nor are any other serious crypto-traders I know.
My alt coin portfolio has taken a bit of a hit, but only 20%. Given the amount of hysteria, you’d have thought that everything was crashing to the floor! I have already taken advantage of some cheap buying opportunities, following the advice of famed investor Warren Buffett when he said, “be fearful when others are greedy and greedy when others are fearful“.
Perhaps this is the best time to buy we’ll ever have again… who knows?