What a week it has been for the cryptocurrency market. Just over a week ago; the market was still extremely bullish. Bitcoin was recovering and there was talk it would march towards a new all-time high price. Ethereum was already in price discovery mode above $4,000, and the rest of the altcoins were doing extremely well. But then Elon Must tweeted, and then come an endless onslaught of FUD. And then the prices of the market tanked, and did so incredibly fast.
But that is how the cryptocurrency market works; the mood and tide can change on a whim; at any time of the day. And based on your ability to change your thinking, strategy, and adjust quickly; it can either sink you, or give you an opportunity of a lifetime.
In this case investing in Bitcoin or Ethereum is a chance of a lifetime. We would be lucky to have only one of those chances in our lives; but we are fortunate enough to have two.
I will be the first to admit that it can be hard to keep your mind sane when you see your portfolio dropping by 50% or more within a week. In one week my mindset went from thinking that I was quickly approaching the numbers I needed to retire, to not even considering it a possibility at the moment. These price dips will be even more stressful if this is your first major dip as well. But there is a way of thinking that will put your mind at ease and help you to survive these difficult times.
The first mindset that you need to have in-order to be successful with bitcoin is to have a low-time preference. This means that you are in bitcoin for the long-term. Set it and forget it. You aren't even going to consider selling it in the near-term no matter what the price is. Because you have full confidence in bitcoin or ethereum as an asset and the price trajectory that it will eventually move towards. This makes the currency price point of them meaningless. Since you're not looking to make a quick dollar and sell next month, that frees you to no longer worry about if the price goes up or down in the short term.
I will share a secret with you that many people do not know. Becoming rich is not that difficult; in fact, it can be very easy. But only if you have a low time preference to do so. Continue to put money away into savings each month, invest as much as possible, use compound interest as your ally, and as the years go by; you will be surprised at just how much money you were able to save up. It will eventually give you financial freedom. Unfortunately; far too many people are looking for get rich quickly methods and far too often will lose all of their money. Boring investing into stable assets that compound is what makes the average person rich.
Which leads me to my next point; in the cryptocurrency market, bitcoin and ethereum are those "boring" assets to invest into. After each paycheck, continuing to put money into both bitcoin and ethereum will set you up very well financially. You can even compound those earnings by either staking or lending your ethereum and bitcoin. But again, people will often gravitate towards using leverage, or investing in the new hot meme coin, or coin that could do a 1000x. But they will lose the trade, get liquidated, or those coins either go to zero or get rug pulled. They would have been much better off just investing into "boring" bitcoin and ethereum. Bitcoin has at the very least averaged a 200% yearly increase in value since its creation, and ethereum has done the same or even better.
Too many people are over-thinking their investing. Thinking that becoming rich by just buying bitcoin and ethereum is too easy of an idea. It can't really be that simple, can it?
Just this week both bitcoin and ethereum have dropped around 50% from their all-time high. Just a few weeks ago we would have given anything to have a chance to buy at these prices again. This is very reminiscent of the March price dump of 2020. If you didn't panic and invested into bitcoin or ethereum during those times; it could have been life-changing for you. I know that doing that was the best decision that I ever did. And now the crypto god's have been gracious enough to hand you another life-changing opportunity on a golden platter. I hope you will have the mental strength to take advantage. It could end up being the best decision you ever made.
As for me, I have been going as hard as possible into both bitcoin and ethereum; taking full advantage of the dips. After my purchases; I'm not disappointed if the price continues to drop, as it gives me an even better opportunity. I know where both bitcoin and ethereum are heading towards; do you have the same confidence?
How about you? Have you been taking advantage of all the coins on sale? Did you buy any bitcoin or ethereum? Or maybe are you waiting to see what happens first before you buy?
As always, thank you for reading!