It has been quite a while since cryptocurrency markets had anything to cheer about. Since the fall of 2021 when Bitcoin set a new all-time high of $69k, it seems the market has been in a constant downward spiral. Going all the way down to $15k before finally seeing a bounce. A drop of 70%. When you go beyond Bitcoin the picture becomes even darker. With many altcoins decreasing in value by 90% or more. If you are still in the market today you are a survivor and likely will see great success in the future.
However, the longer that you have been in the cryptocurrency market, the more often you continue to see people making the same mistakes over and over. In the deepest and coldest point of crypto winter when prices are at their lowest, people are constantly watching the price of their portfolio. Increasingly becoming panicked, and declaring that they have lost thousands of dollars, if not more. Seeing this huge “loss” in their portfolio causes stress, regret, and even depression. For some, it can be too much for them to handle causing them to sell out of their positions. Fulfilling the prophecy of buying high, and selling low.
These are all normal emotions to be feeling, especially if this was your first crypto cycle. But there is a problem with the situation above.
The problem is valuing your crypto portfolio using dollars as a unit of account. Upon entering the crypto market, we are all aware that this asset almost always moves up and down in cycles. There will be incredible days, but there will also be disastrous days as well. Paper gains or losses are only numbers on your screen until you decide to sell. Veterans in this market don’t value their portfolio in dollars, but the actual crypto themselves, or comparing its value against BTC.
While crypto prices go much further down than any of us would like during the bear market. These times are also amazing accumulating opportunities. During these times you will continue to accumulate more of these assets and the value of your portfolio in dollars will often stay the same or even drop further. However, this crypto accumulation is similar to a slingshot. While you are accumulating, you are pulling the sling back further and further. The crypto holdings in your portfolio have grown, but you haven’t seen any results in terms of dollars yet.
Finally, when the bull market arrives, that is when the pressure on your slingshot is released and soars upwards. You are building during the bear market expecting little to no results. But, you will be able to enjoy the fruits of your labor during the bull market. All of this is assuming that you are investing in Bitcoin, Ethereum, or the few other blue chips in the crypto market. It’s not a guarantee that low-cap altcoins will ever recover.
Always remember that 1 Bitcoin = 1 Bitcoin, and 1 Ethereum = 1 Ethereum. Once you finally begin viewing your portfolio using crypto as your unit of account, you have moved one step further in your crypto journey.
How about you? Do you use crypto or dollars as your unit of account?
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