Feb 2, 2022 | OPINION
How to handle yourself when Bitcoin price drops: Part I
How do you manage your portfolio when crypto prices drop?
Bitcoin’s price has plunged dramatically in the past three months. The leading cryptocurrency has lost over 50% of its price, considering it got an all-time high in November last year.
Ethereum (ETH), the second-largest digital currency by market cap, has not escaped the slump that lost more than 50% of its price. BTC and ETH are not only experiencing the downtrend; it is the whole crypto market.
Others even describe this crypto scenario as nerve-wracking. Still, it is good to know how cryptocurrency investors are handling dropping prices.
Taking a long-term view in Bitcoin price
Bitcoin has undeniably dropped many times, but it has shown incredible gains in several ways. It includes pushbacks, such as China’s crypto blanket ban in 2021.
Regulating cryptocurrency is still up in the air. Some countries impose or may establish stricter rules on how digital currencies operate. These are among numerous factors that affect investors’ long-term view of their cryptocurrency investments.
A tech journalist, Evan Rodgers, has been investing in crypto since the pandemic hit the world in 2020. “You need to look at the actual number of Bitcoin that you have and realize that’s not changing,” he told TIME. “There’s just a short-term price effect happening.”
Facing a challenging time helps a trader to learn how to minimize risk. Like Rodgers, you have to learn how to take a more secure approach and have a “bitcoin strategy”.
Looking at the bigger picture in cryptocurrency could build investors’ confidence in the market. In addition, it could reform some unwelcomed rules into favorable decisions.
Being calm. Do not rush.
Traders do not want to see the value of their investments halve, yet some of them are tempted to sell their digital coins because the prices are suddenly dropping.
According to Investopedia, “panic selling” means “widespread selling of a security based on fear rather than reasoned analysis causing its price to drop.”
However, the founder of Girl Gone Crypto, Lea Thompson, revealed a different approach. She stated that price dips also provide an opportunity to buy more coins as long as an investor has faith in a particular coin’s future performance.
“If you’re flipping an NFT or trying to get a great return on some other altcoin, there’s a lot of potential money to be made,” Thompson added. “But if something is really valuable in the long run, then these market dips are more an opportunity to accumulate more than something really scary.”
As an investor, it is important not to rush into a decision. You have to evaluate what is going on in the market. Remember, you need to be diligent in researching each digital coin or token.
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