Last updated on February 8th, 2022. Posted in Bitcoin Blockchain & Crypto.
Bitcoin price -- what does the price of bitcoin tell us about where bitcoin is going? Well that's exactly what this video's all about. So, let's jump into the price of bitcoin, or bitcoin's price!
Here are links and resources mentioned in today's video. Enjoy!
I don't know if you keep an eye on the price of bitcoin or not, but through December 2021 and into early January 2022, the price of bitcoin along with other top cryptocurrencies like Ethereum, Cardano, Solana, and others has utterly collapsed!
I haven't sat down and run the EXACT math, but we're talkin' price drops of around 25% at a MINIMUM.
Some crypto coins are down even more...into the -50% range. Dang!
And you know what?
I was talking with an associate of mine around this time (he was all worried and freaked out, focusing on how much money he'd LOST) and I was trying to reassure him of two things:
(and of course, standard disclaimer: None of this is financial advice. Proceed at your own risk!)
1) You haven't LOST anything until you panic and sell.
When we're focused ONLY on how much money we've LOST, we panic, set our own hair on fire, and sell as fast as we can...because we can't stomach losing more money, right?
But if you weather the storm and don't sell (because you know what the long-term trend is), your "loss" isn't realized. It exists only on paper and is temporary.
In other words, your loss isn't LOCKED IN. You haven't *actualized* a loss until you sell.
Does that make sense? Next, 2) When we see a 25% price drop...a 50% price drop...or MORE...to me anyway, it's like crypocurrencies are having a Black Friday event!
Again, if we know the long-term trend (and admittedly, that takes some reading and research...but in my opinion the long term trend is UP -- but again, none of this is financial advice!)...
...then when we see a massive price drop like this, in my mind, it's a HUGE buying opportunity.
(And regarding the long-term trend, just quickly while it comes to mind, not only has El Salvador embraced bitcoin as the national currency, but many corporations, financial institutions, and private businesses are ADDING bitcoin to their balance sheets. These are STRONG indicators!)
Valuable things don't go on sale very often...so when they do, personally I take full advantage of the "flash sale."
It's like when frozen pizzas go on sale at Costco...back up the truck 'n load 'em up!
So that's how I see things. When we're confident in the long-term trend (remember, the trend is our friend), then who cares about daily price fluctuations?
(I don't even care about the monthly or even annual fluctuations -- I have a minimum 10-year time horizon!)
Most importantly, when we see a price collapse like this I don't focus on how much money I've LOST.
As I repeated several times in my book Understanding Bitcoin, price is the LEAST interesting thing about bitcoin.
Yes, I truly believe that -- price is the least interesting thing about bitcoin!
Instead -- and this is just me -- I focus on how many UNITS I own.
So when I'm confident in the long-term trend...and there's a "Black Friday Event"...I go and scoop up as many units as I can...just like when frozen pizzas go on sale.
That's my approach at least. And maybe this perspective works for you, too.
Then again...I could be totally wrong...who the hell knows!
(which means I've gotta protect my downside...but that's a whole other conversation)
Anyway, hopefully these are some interesting ideas for you to churn around.