Volatility has set in on worldwide stock markets with the Dow Jones Industrial Average, the most popular stock exchange in the world, experiencing massive 600 and 1100 point drops in the past 2 days alone. It is now off by 8.5% from its record highs established just less than 2 weeks ago.
This however still pales in comparison to the selloff we're witnessing in the cryptocurrency world, with bitcoin, the most popular cryptocoin today, now off by more than 60% from its record highs established less than 2 months ago. While the magnified volatility is not new with cryptocurrencies, this prolonged downturn has certainly put many enthusiasts and traders on edge.
To those who have been with bitcoin from the very beginning, the price at this level would still represent handsome gains. However those who have gone in at the wrong time would probably be sitting now on unrealized losses. Where do we go from here? I don't think anyone has a concrete answer.
What I can say is that whatever coin you're in, what you can do is look beyond the short term price pressure and evaluate what the coin is about, what it stands for, what it aims to accomplish, what is the future roadmap, and others. Look at this fundamental picture, and ensure it is sound and concrete.
Renowned fund manager Peter Lynch mentioned in his the book Beating the Street: “This is one of the keys to successful investing: focus on the companies, not on the stocks.” I do think this can also be extended to cryptocurrencies. Look at the fundamental picture of the coin; in the long run, the price will take care of itself.
At the end of the day, we're all hoping for some stability to set in, and price to reflect the true value of what each coin is worth. Let's hope this comes sooner rather than later.
Risk Warning: All comments, charts and analysis on this post are purely my own and should in no way be treated as recommendations or advice, nor should they be construed as an endorsement or recommendation to buy, sell or hold. Please do not trade based solely on the information provided on this post. Furthermore, past performance does not guarantee future success. Always do your own due diligence and analysis when trading.
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