Cryptocurrency is FALLING
It's been a very bad week in the crypto trading world especially if you like the mainstream coins like #btc, #ether or #xrp because they've all been taking a major hit.
So what does that mean for the beginning investor?
Jump In or Stay Away those, of course, is the most common two choices. I'm going to review the pros and cons of each one before this post is over and by paying close attention you'll learn my preferred position.
Stay Away
Most beginning investors and naysayers will tell you to stay away from all cryptocurrency right now especially since it's so volatile. Here are 5 reasons to stay away from all cryptocurrency at this time.
You don't have money to lose.
Anytime someone asks me about any kind of investing the very first thing I ask them is how much they're willing to lose because even the safest investments can have a downturn and it's best to be prepared for it going in. Crypto investing is one of the most volatile actions you can take with your money and therefore shouldn't ever put up more than you're willing to lose 100% of. If you're safe knowing this before entering in then this shouldn't be a problem.
You can't handle falling prices
Watching your portfolio value decrease by the day, hour or minute can be a very tough thing to experience, especially if you're emotionally involved with your investment decisions. This is why the second thing I teach my investors is to remove their emotions from their investments. Keep in mind that investing is all about the numbers and nothing else! You can also logout of the exchanges and come back at another time.
Stress is your enemy
SERIOUSLY... if you have a heart condition or can't handle stress during a down market then it might be best to sit things out. Try some meditation, exercise or find some other way to let out the stress because just like stated in number 2, it's about the numbers yet it's not for everyone.Security is very important to you
Truthfully I've gone through a bankruptcy, lived in foster homes and been in many other insecure positions in life. So yes #security is very important to me and it should be something that you think about however the most reward is found in the more risky situations. You'll never get further faster without letting go of some security and rely on your knowledge to keep you moving forward.
Fear that it'll bottom out and disappear forever
Bitcoin was the very first cryptocurrency released and that's been around since 2009. Could it just get up and disappear tomorrow, it could yet the real question should be why would it. As of this writing, there is $397,267,444,481 in United States Dollars worth of cryptocurrency in circulation, and that's only the ones being tracked by Coin Marketcap. There are still, even more, smaller coins that don't even get tracked by them yet because they're still within the #ico stage or are being kept private at the moment. Close to 400 Billion Dollars is not going to just disappear overnight and this technology is here to stay whatever the name or specific algorithm might be.
5 Reasons to Jump in NOW?
I'm sure for anyone that's read this far you'll notice that I'm a fairly risky investor and confident in the cryptocurrency world even if it doesn't appear very stable. Honestly, even though I do believe crypto investing has major upsides, I do also understand the risks and ALWAYS follow rule number one of never risking more than I'm willing to lose FOREVER! That being said here are my 5 reasons to jump in, which includes if you're already investing you should even buy more (if you have EXTRA money laying around).
What goes down must go up
Just like the old saying goes, what goes up must come down, well with paper/digital assets what goes down must go up as well. It's a rollercoaster ride. Buy in the valleys and sell during the peaks for more reliable profits. The major problem is most people follow the crowd and are always way behind the curve.
Last Years Prices Today
Have you ever wished you could buy an asset today for last year's prices? Well, that is exactly what's happening right now. The price of bitcoin was just under $6,000 in early November last year, has been on a fairly steady incline since and right now is in the $8,000 price range. It made it up to over $19,000 prior to this readjustment. Meaning it truly is half off of its all-time high.
Fiat currency reduces in value every day
With inflation and the world governments printing more money every day, truth be told since we're no longer backed by anything but our "good credit" the US Dollar is actually worth less than it was today than it was last year, therefore, you'll actually be getting a better deal dollar for dollar.Dollar cost averaging
Since I'm not a professional trader nor licensed to give people advice I try to not use fancy terms yet the very first investment term I learned when buying paper assets was dollar cost averaging. In brief, it's when you buy at different prices over a longer period of time since the intention is to hold and over time almost all paper assets go up because of human nature and (de)inflation.
Cheaper one currency the more you can buy of another
This one is a little more difficult to explain however as you'll see from the image of some altcoins I'm currently holding, they're going up while the major coins are continuing to fall. This is caused because you can only buy using one of the major currencies therefore if the price of #btc goes up then most altcoins go down and vice versa. So buy while bitcoin and #ethereum are low so you can grab more of the smaller coins, ride the way up and cash back out.
Conclusion
Needless to say, my recommendation is to buy, buy and buy some more while you can (if you can afford to let it ride). Some investors suggest waiting until it hits bottom and then starts ticking back up and that, of course, is a great choice if you're going to watch it constantly because just like how it can drop 20% or more in a single day it can also jump back that quickly.
Hopefully, this provided some additional information for you to consider this major adjustment we're seeing. Those of us that have been paying close attention actually expected this adjustment to come in the middle of January instead of now but it's here now....
