To no great surprise, this morning there was a rash of "bloodbath" articles everywhere, following Bitcoin's tumble from over $19,000 to $10,900 a low and change.
And, of course, many alt. coins followed suit in the decline... showing us, once again, that the world still clings to the (mis)perception that "digital currency = Bitcoin."
Maybe we should just take a deep breath and poke around in the underlying reality here.
Don't Panic! We've Seen This Before
When you're "in the thick of it" in a nascent industry, it's easy to become a bit myopic and think "OMG this has never happened before!" But seriously, folks, we have seen this before. And we've seen it in somewhat recent history.
Crypto price chart in nature?
Many believe that cryptocurrencies represent "the future of money" and the way we interact with doing business with each other. I think that may well be true... but we're part of the earliest stage of developing a revolutionary new technology.
Assuming we believe this is true, let's step back for a moment and think about a couple of other "revolutionary technologies" we have recently seen: The Internet and Mobile Phones.
The Internet revolutionized the way we-- meaning ALL of humanity-- communicate and do business. It was the opening of the virtual world. But the early days of investing in Internet related technologies was an extremely bumpy ride. And the industry went through numerous adopt-reject-adopt-reject cycles before it truly became mass market... in fact it was close to TEN YEARS before "being online" was not considered something "weird" for nerds and academics.
Looking backwards... to see what's ahead
Mobile phones revolutionized the way we talk to each other. In the early days they were seen as a "fad" and perhaps something for wealthy business people. And yet... today pretty much everyone has a cellphone. In fact, the market penetration is so thorough that there are people in developing nations who have no technology AT ALL... except for their smartphone.
My point here being that if you were an early investor in either of these technologies, there were just as many huge rises and dips during the early years. People who bought Yahoo or Nokia stock lived with their investments tripling in value in a month, and then cutting in half.
These wild price swings are normal with the sort of new technology we are dealing with! Why? Because at this point the market is trying to price the potential of something, rather than the actual developed product... and potential tends to run more on rumors than reality.
"Investing" vs. "Playing the Lottery"
A solid foundation
I know there are a lot of people out there who are "traders" and are trying to build their fortune by investing in the next hot tip they come across.
To be honest, trying to "time the market"-- whether you're in high-flyer tech stocks or cryptocurrencies-- is treacherous water, unless you dedicate your entire life and every waking moment to understanding the micro-trends of what moves a handful of securities you're expert at.
If you don't have that level of dedication and expertise, you're pretty much "tossing darts," sorry. And that can be a really costly experience, because most neophyte investors tend to bail from the market at precisely the wrong time.
The sun hasn't set on us yet...
So... unless you're an expert, trying to "time" the ups and downs of cryptocurrencies it far more like "Playing the Lottery" than it is actual "Investing." And I say that as a former day trader in technology stocks.
Investing suggests that you like the fundamental premises of an industry or a product, and buy into it for the long haul-- holding the asset until conditions change to where your original reason for investing no longer holds true. If you believe in the fundamental promise of cryptocurrencies and blockchain technology, just hand on to your coins.
So... my suggestion is that you just chill out and enjoy the ride!
What do YOU think? Do people freak out too much over market swings? Has Bitcoin (and certain others) been in an upswing for SO long we've forgotten that prices also go down, sometimes? Did you know that the price of Bitcoin tumbled all the way to where it was... on December 6th? Do you believe in the fundamental technology that fuels cryptocurrencies... in the LONG run? Are you invested for the long run? Or are you a trader? Leave a comment-- share your experiences-- be part of the conversation!
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created by @zord189
(As usual, all text and images by the author, unless otherwise credited. This is original content, created expressly for Steemit)
Created at 171222 12:52 PDT