馃搶 How to ignore bitcoin volatility ?? (For #beginners)
鈽戯笍 Read Completely
鉁旓笍 In order to ignore the volatility you simply need to change your mindset about what Bitcoin is and what to expect from it. Bitcoin is an incredibly interesting experiment with a vast amount of upward AND downward potential.
If you want to own some bitcoin then you have to believe it is worth taking a mid to long-term financial risk into it. Therefore, treat bitcoin as if it is the polar opposite of itself.
鉁旓笍 Consider bitcoin to be the same as a CD or Certificate of Deposit.
Pretend bitcoin is a 3, or 5 year #CD. When you buy a real #CD the value of it fluctuates while you hold it. If you sell out before meeting your time horizon, chances are you're going to have less than what you started with. Same for bitcoin.
#CDs typically sell in lots of $1,000. Pretend, for example, you're buying a $10,000 #CD however the principal amount can either be deposited slowly over 3 years or all at once. If you don't have the $10k right now you can easily dollar cost average into the pretend Bitcoin #CD every paycheck for at least 3 years. (Wouldn't hurt to buy the dip either.).
鉁旓笍 If you use a service like coinbase you can set this up automatically. But just like a #CD, once you buy in, the money is locked up until the maturity date.
To ignore the price, set a firm time horizon.
鉁旓笍 For everyone asking if now is a good time to buy, YES! Now is an excellent time to buy if you're willing to stick with a firm time horizon.
1- Setting a firm time horizon with yourself.
2- Dollar cost average in. "I will buy $10 / day or $150 per paycheck or $300/month every month for 5 years regardless of price."
3- Hodl! "In the same way I hodl in a #CD I will hodl my bitcoin until my time horizon has been met. I will pretend this money is inaccessible no matter what."
4- Profit. "Should I take the Lambo or the Ferrari to my vacation home this weekend?"
Remember, the huge difference here is Bitcoin in no way shape or form, is the same as a #CD. This is all about changing your mindset. When you pretend the money is locked up in a #CD and inaccessible until a specific date, ignoring the price becomes significantly easier.
The exact same principal is applied to a 401K or an IRA
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