Hello fellow Steemians,
As I'm sure many of you are aware, this last little while has been difficult with a lot of downward price movement for most of the cryptos out there. Is this a crash? Is the bottom coming soon? What's going on?
I remember the big stock market fiasco of 2008. I was heavily invested in a variety of stocks and mutual funds at that time. When everything started to tank in a way that nobody had ever seen before, I freaked out and got completely out of the stock market as it was going down, so I lost a bit of money on my way out.
I was happy and relieved to be out though because I thought that I might lose everything I had invested. Essentially, I was starting to believe that the system was fundamentally broken in a way that it might not ever be able to recover from.
Years later, I met up with one of my friends and an investment advisor that she works with. His name was Mike and he explained how he made so much money during the 2008 crash when almost everybody else (except Warren Buffet) was afraid and was pulling out. He showed me this chart that tracked the stock market since it first began and showed how it's gone through a series of cycles over the years, bull and bear markets/highs and lows/bubbles and crashes, but that overall, the trend is always inching up bit by bit.
He said that the people who are smart actually use the time when others are panicking and trying to out to actually bolster their positions. Before he explained it that way, I would have never thought about actually getting in and buying when everything was going down. But he was living proof right in front of me that it actually can work as it worked for him.
Before I met up with him, I also went through a crash in crypto land. I don't remember the exact date, but I'm pretty sure the year was 2014. Cryptos had just skyrocketed a little while before and I was having a lot of fun investing in it and learning all about it. Once it started to crash though, it just wasn't that interesting to me anymore. I started doubting the viability of cryptos in general and thinking that maybe I had already missed the boat, the real big gains might have already happened and maybe this was just a fad that was going to end soon and badly.
I'm glad I held onto all of those cryptos for the three years that I just ignored the whole crypto space, because when things started to massively come alive again in 2017, I was drawn back into it and managed to make a little profit.
Now I'm full on into cryptos again with an important lesson that I've learned from my experience. The chances of the ground completely falling out from under us with the entire stock market or the entire crypto currency industry is very, very unlikely.
In fact, it never happens. Instead we just have cycles of bubbles and crashes driven by the core human emotions of greed and fear. This will never change about human nature so it's impossible to escape this boom/bust aspect of trading in both the stock market and in crytos.
So, how do you win when cryptos start to crash? Be very aware of what the crash is doing to your emotions and how your emotions are driving the actions that you want to take. Then, STOP yourself from blindly taking actions based on whatever emotions are coming up for you, take a pause, and really think about what's happening.
Is this crash presenting an opportunity to potentially buy in and gain a greater position at a discount?
Is it possible that if you sell your position now, you will make less money than if you simply waited and sold a year from now?
Do you see a better opportunity on the horizon that you want to take advantage from and would selling now be able to help you do that?
Good luck, stay strong, and find courage through any fear!