Chances say that if you are following any major bitcoin trader you had heard bitcoin could not possibly fall below $10,000 USD again. I was not among those making that prediction and in fact laughed at the ones who made this claim.
I have told people again and again bitcoin price cannot truly be predicted.
Right now the cryptocurrency media is in a frenzy trying to figure out what has caused this. What is Brexit? Was it the news about Donald Trump being impeached? Was it Whale manipulation? Was it the Bakkt launch and unexpected lows of futures contracts?
The truth is no one knows and no one will ever know. People will always speculate. Some things, I believe however, can safely be predicted such as when I wrote about Bitcoin and the power of scarcity and mentioned the likeliness of a vast increase in value do to the bitcoin halving that will take place next year - however day to day volumes can never be predicted.
In fact even within that post one can find me saying "The truth is no one has ever been perfect in speculations". This is because day to day predictions are impossible with bitcoin. The charts only tell a small piece of the story with bitcoin.
You can't Predict Emotion
The one thing charts don't tell us is the emotional factor involved with trading. We don't know what will cause people to panic and sell. We don't know if it's some piece of news that spooks a whale and then dropping prices spook everyone else. We don't know if some news spooked everyone.
We don't know how many people that invested in crypto also watch the precious metal markets and traditional stock markets. We just don't know.
This is why I am not a short term investor. I am someone who sees a long term game and ignores the short term.
The truth is when dealing with cryptocurrency there are only three times that a person loses money - if a project is a blatant scam stealing funds from people, if a currency loses all support and goes broke, or if a person panic sells.
When dealing with bitcoin only the last of those three things comes into play. If you panic sell, you lose money.
FOMO Buying and FUD selling
Lets say you FOMO bought into bitcoin in 2017 when it was at $20,000 USD. FOMO means fear of missing out, which is sadly what causes a lot of people to get involved with cryptocurrency during large rises.
If after the price fell back to $5000 you FUD sold, which means fear, uncertainty and doubt caused you to sell, that means you lost $15,000 dollars per bitcoin. However if you had a long term strategy you didn't lose anything. You are still holding the same amount of coins you purchased.
Because bitcoin has proven itself time and time again, the likeliness of it rising again to a value above that $20,000 mark is very great.
Lets assume my predictions for next year are correct. I believe bitcoin will reach the $100,000 USD level after the bitcoin halving event next year (or perhaps as was the case with he 2016 halving event it will take an extra year - until 2021 before it reaches $100,000). If you didn't FUD sell, that means you could still sell those coins for a profit of $80,000 USD each.
Bitcoin has an amazing long term track record but not the most amazing short term track record.
Bitcoins History of Death
In 2010, the first usage of bitcoin ever recorded took place. This was long before trading cryptocurrency became possible. That first use case was the sale of pizzas. 10,000 bitcoins were used to purchase 2 pizzas which had a $30 USD value.
That means in 2010 each bitcoin was worth $0.003 USD. That's a vast difference from today's price of $8000+ USD. The ride between $0.003 and $8000 however has not been smooth. Cryptocurrency does not work like stocks where there are small gains that add up with small losses along the way.
Cryptocurrency works with massive gains and massive losses. This makes short term gains considerably harder to predict but long term gains much easier to predict.
In fact, so bumpy has the ride been that the death of bitcoin has been predicted by main stream media over 350 times. Of those predictions, 38 of them happened just this year but this has been ongoing since 2010 and happens every time a major dip in value takes place.
A quote from dailycampus in 2015 said "A single Bitcoin’s value, $240 at the time of writing.....After analyzing the facts, it becomes apparent that Bitcoin is not destined to grow and mature beyond what it is today.".
The point is every single time bitcoin has been predicted to be doomed or its value has been predicted to have peaked, bitcoin has risen again and again and again. Those who panic sell miss out time and time again. Many have simply walked away from bitcoin and crypocurrency because of it. No one informed these people you need to buy and hold, and hold more, and hold more.
Bitcoin is not a stock. Its not a short term investment. If you are going to be in it, be in it for the long game - not the short game. If you can't afford to do that, don't invest tons into it. Get a couple dollars here and a couple dollars there until over the years it keeps adding up.
My Coinbase woes from 2014
In 2014 I broke up with my girlfriend at the time. I had a whopping $5 or $10 in coinbase. My 2FA was connected to her cell phone at the time. When we broke up I lost access to the account.
At the time I didn't think a lot about it. After all it was only $5 to $10. No big loss really. On occasion I would try to regain access to the account but was always denied because I couldn't receive the verification code sent to her phone.
At some point over the years, her phone number was disconnected and the number went back into the pool of unused cell phone numbers. I kept trying to regain access to the account and kept being denied - until last month.
Three months ago I contacted coinbase support again. I pleaded my case again. I told them the number no longer existed. I told them I was no longer with the person who originally owned the phone. I told them the last time the account was accessed was in 2014. I told them what city I was in when I created the account. I fought and fought for weeks and weeks going back and forth with them.
Ticket after ticket after ticket I would not give it up. Then one day, I finally was granted access! I am not sure how it happened, but someone finally woke up to the fact I knew to much about the account and no one else could have possibly been the owner. Access was given back to me!
My couple of dollars in bitcoin, had turned into nearly $200.
HODL - Hold on for Dear Life
My point in sharing this is to help you realize that although a few dollars here and there may not seem like a lot, after a few years these few dollars start to add up more and more and more - but that will only happen if you let it.
You can't panic sell every time the markets drop. It doesn't mater how high the values go. It doesn't matter how low they get.
Someone out there always has the view that they should do what traditional investors do and try to sell at the top and buy at the bottom, but even that I recommend against.
People often miss out because they sell at what they expect to be the top, only to see it raise hundreds of percentages more. Someone always thinks they are buying the dip only to find the dip keeps going lower and lower and lower and they keep panic selling causing more and more loss.
What I recommend is pretty basic. Buy bitcoin. Buy as often as you can and as much as you can afford without having to "dip back in" in the future. Put it in a wallet and just forget it exists. That is how you make REAL money with bitcoin over the long term.
At the end of the day it's really simple. Ignore the news. Ignore the charts. Don't try to figure out why its going down or going up.
Don't bother with day trading. Just buy into the projects you believe in and ignore the rest. This is what I do with NEXT.exchange. This is what I do with Bitcoin. This is what I do with every single coin that exists if I am going to invest because I see cryptocurrency as a currency not as a stock investment.
I strongly recommend that's what others do as well.
As the image above says, just Hold on for Dear Life.