Bitcoin is an accumulation game for years to come. This is something I keep saying. I am convinced that the price of Bitcoin will go much higher than it is now. I don't have any crystal ball at my disposal. So I can't give you any dates or guarantees. I can only tell you that my conviction was formed after understanding the why of Bitcoin and continuing to deepen my knowledge for several years.
This understanding of the long-term goals of Bitcoin has allowed me to take the right approach with Bitcoin: the long-term approach. Bitcoin forces you to redefine your time horizon if you want to take full advantage of it.
Once you've done that, you'll understand as I do that the most effective strategy with Bitcoin for most people is the simplest one too: Buy Bitcoin, HODL Bitcoin no matter what, Repeat.
Unfortunately, too many people struggle to apply this strategy although they know about it. The reasons for this are primarily psychological in my opinion. And these reasons prevent many people from taking advantage of Bitcoin because they prevent them from regulating their emotions properly.
Understanding human emotions
Before talking about these psychological reasons, I think it is important to understand human emotions and their impact on our actions. There are generally 4 basic human emotions: joy, anger, sadness, and fear. Some add disgust and surprise to these basic emotions. An emotion is brief, lasting less than 90 seconds. Emotions are useful, they are a signal that allows us to react to a need that is not satisfied.
Faced with these emotions, some people will be overwhelmed, and others will use them to their advantage. Your interest will be to use your emotions to your advantage. Let me give you an example: the price of Bitcoin crashes by 50% in a few days or months. Even if you are a HODLer, you may feel fear. We are all human, and it is normal to feel these types of emotions.
What will make the difference is how you use that emotion. Some people will panic and then let that fear rule them. They will sell their Bitcoin at a loss. This will be a mistake, and they will realize it later in hindsight. But in the heat of the moment, they will not have been able to step back and understand it.
Others will understand that this kind of crash is typical of a free market like Bitcoin, and so they will see it as an opportunity. Those who manage to take advantage of it can do so because they are not trapped by 3 major psychological reasons.
1. You can't stand the volatility of a free market
Bitcoin is the world's only truly free market. Exchanges take place all the time. No one is going to stop trading when the price of Bitcoin goes up or down. This means that your emotions will be put to the test with Bitcoin. Euphoria and fear are emotions to be mastered. Both are equally difficult in my opinion.
To better control these emotions, you need to understand that volatility is a feature of Bitcoin, not a bug. The price of Bitcoin has already crashed eight times by 50% or more. So this is a normal thing. If you want to profit from Bitcoin, you're going to have to accept that volatility is part of the game.
Rather than letting the fear of it rule you, you have to look at it from the other side: every time Bitcoin's price has crashed, it has always bounced back strongly to beat its previous ATH sooner or later. So the secret is patience with Bitcoin.
As long as you don't sell, you don't lose anything. So there's no need to panic with an asset with such incredible potential as Bitcoin. Instead, see every crash as an opportunity to accumulate more BTC.
2. You let the short term take over the long term
Those who can take advantage of crashes or dips in the price of Bitcoin can switch from a short-term mode to a long-term mode. So instead of looking at it as what if the price of Bitcoin drops after I buy it at $35K, I invite you to ask yourself: will the price of Bitcoin be $100K or more in 5 years or 10 years?
My answer to this question is obviously yes. Under these conditions, I have every incentive to continue to HODL and buy more BTC. Some people will tell you: “Yes, but if I wait even longer to buy even lower, then I will have more ...”. Of course, however, the rule is “Buy Low, Sell High” and not “Buy the Lowest, Sell the Highest”.
You will never be able to time the market accurately. You will, however, be able to act on market trends. When you see the price of Bitcoin drop by 50%, you know it's a good opportunity. Maybe the price will go down a little more, but whatever happens, this price level will prove to be excellent in the future.
To take advantage of this, you need to learn to take the long view.
3. You don't have a plan
Everyone needs to define a plan with Bitcoin. I have my plan with Bitcoin. I am a HODLer of last resort and I am betting on a hyperbitcoinization of the world in the future. I may be wrong, but this is the plan I have been following since my first steps in this world. This plan allows me to feel good psychologically when the price of Bitcoin crashes. It allows me to get through the Bitcoin revolution with peace of mind.
On your end, it's up to you to define your plan with Bitcoin. Once you do, you'll only have to look back at your plan when the price of Bitcoin acts unexpectedly for you.
If your plan is for the medium to long term, why worry about a crash? Continue to act patiently by building your game step by step through regular purchases of BTC. In case you choose to be a Bitcoin trader, you will indeed have reason to worry about crashes. But if you do choose to be a Bitcoin trader, I think that you will have taken care to train yourself properly in this field so that you don't end up losing a lot of money like the majority of those who make this choice when they don't have the skills.
Final Thoughts
Profiting fully from Bitcoin requires learning to regulate your emotions properly. You cannot succeed in this market without consistent management of your emotions. To do this, you need to be aware of the 3 psychological reasons I have just detailed.
The first essential step, in my opinion, is to understand that the volatility of the Bitcoin price is part of the game. Some people can't handle it, and those people should probably seek to learn more about Bitcoin before jumping in.
Once they understand the why of Bitcoin, they will understand that the best plan with Bitcoin is linked with a long-term vision. This way, you will be able to not let the short term get in the way of your plans.
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