The cryptocurrency market is a place where dreams can come true and lives can be changed financially forever. However, something that many people choose to ignore is that it can also destroy people’s lives. If there is one idea that I have stressed the most throughout my articles; it is that the crypto market definitely isn’t for everyone. It will be one of the most stressful experiences that you have ever gone through.
For some people, this is their first investing experience. For others, they have plenty of investing experience. But the truth is that none of that experience could have prepared them for what they will deal with in the crypto market. It is the most volatile financial market. In other markets, an asset going up or down by 10% would be the most important day of the year. Either causing great euphoria or panic. In the crypto market, it is simply called a Monday. That is how often these types of movements happen.
Investing in the crypto market isn’t that difficult when you aren’t playing around with significant amounts of cash. But, when you have several thousand or more on the line, that is when the stress of the market begins to ramp up. For example, let’s imagine you had $40,000 invested into Bitcoin, Ethereum, and crypto right after the Covid price crash of March 2020.
From that price crash to Bitcoin’s new all-time high, the market went up by 20x. All of a sudden your $40k had turned into $800k. The euphoria the market was giving you was nothing like you have ever experienced before. You likely began thinking about how if the market increased by 2–3x more, you could possibly retire.
But, then the bottom fell out of the market and your portfolio dropped by more than 80% in only a few weeks. You went from having possible retirement on your mind, to having a portfolio of over $800k. To it dropping down to $100k.
In the general scheme of things, you're actually still up from March 2020, but it doesn’t feel like it. All you can think about is the pain of having $800k a month ago, and it now being $100k.
This is life in the cryptocurrency market.
If the constant volatility wasn’t enough; you then need to deal with constant FUD thrown toward your investments. The SEC debating whether ETH is a security, China banning Bitcoin, mining FUD, and the list goes on. At some points during the bear market, it seems like there are two certainties that you can count on happening each day. The first is that you can count on prices dropping each day. And the other is that you can count on there being new FUD in the market each day.
It is a powerful combination that can cause extreme stress. Especially when you have large amounts of capital invested in the market.
But is investing in crypto worth the stress?
We have all heard the claims that Bitcoin, Ethereum, and crypto will cause the largest transfer of wealth the world has ever seen. That those who are investing in the market now are early adopters and will reap the rewards. That alone is reason enough to actively be in the market.
However, if the stress of the market is affecting your life in a bad way that you aren’t enjoying life anymore. That is a time when you might need to re-think your crypto strategy. Perhaps you simply have too much of your net worth invested in the market. Lowering this amount could make you much less worried about daily price movements.
The strategy that has worked for me is that I only invest cash in crypto that I can afford to lose. When I buy Bitcoin or Ethereum, I have already fully accepted the fate that it could go to zero. In an odd way, this helps to ease my mind. I also decided to have a long-term approach. Where I won’t even consider selling for several years. If that is the case, that means daily price movements don’t need to concern me. Which also means I don’t need to constantly check prices.
This leads me to my final point. The people who have suffered from extreme stress from this market might simply be too connected to it. Constantly checking the price, reading news articles, or watching YouTube videos. They are often over-dramatized to get clicks, which can affect your state of mind.
I won’t lie, the cryptocurrency market definitely isn’t easy. It’s actually very difficult. But even with all of the stress that it causes, investing in it is still the best decision I have ever made. It has completely changed my life, and it can change yours too. It definitely is worth the stress.
How about you? Do you think crypto is worth the stress?
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As always, thank you for reading!
