We are currently in a situation that makes us doubt ourselves. This post is about finances and strategy. It is about our mindsets when approaching the concept of what is currently happening in the world of crypto as well as the stock markets.
I do not have inside information about the reasons or what is going to happen in the future. Likely things are changing right now under my nose and I have yet to find out. Thus, this is not financial advice. Each person must do what they see fit.
But what my post deals with most! People!
Cryptocurrency is decentralized money. We all wanted that concept of massive banks and countries not taking control of our finances. We seek to be self-governed, we seek to control our own worth.
And yet... most people are looking at the value of each cryptocurrency in relation to their local fiat as well as its relation to the USD. If you live in USA, likely only the relation between BTC and USD.
This is the opposite of decentralization. We turn to fiat as a measuring stick. We plan and plot and trace and the millions in our minds we want to have are converted into fiat and so our dreams are driven.
Our indoctrination into the concept of value is thus heavily ingrained.
Mindset
Beyond that we look at the crypto market and the buy and sell happens based on analysis, strategy and speculation yes. BUT, it is undeniable that people also buy and sell crypto based on emotions. Crypto has this feature far heavier than other stocks and investments because it is far more accessible and global.
Now the most average person has access and ability to purchase crypto. This means there are plenty people who do not have any clue how it works and is not involved in the utility and staking rewards of crypto.
They merely buy and one day sell. Usually upon encouragement from others.
Even those battle hardened investors are assaulted by the basic psychology of fear uncertainty and doubt. These things will make use question our decision making skills and even our experience.
Solution to Panic
We need to look at the human element, what we know about the market on an historical level and look for items that might not be in our minds when we are in this condition.
One is this emotional procedure. People panic and sell. This causes more and more market capacity to dump and what happens to trades that run towards the SELL option when thousands of people participate? The value drops.
Counter suggestion: Then who is buying the crypto?
In this case we can consider cryptocurrency, especially BTC to act in terms of thermodynamics. The cryptocurrency is transferred from place to place. 1 BTC equals 1 BTC.
Something I know from some of the other tokens "crashing" on Hive Engine, we can see someone selling, waiting and then buying in way lower not once, but in tiers.
This person is using strategy to increase their stakes.
Future
6 months ago we saw all time highs and 6 months prior we saw massive lows and people panicking like they are doing right now.
Therefore in 6months from now things will have changed again.
If you want food on the table, get a job and a steady income. The markets will trade up and trade down.
However, we are seeing adoption of crypto as legal tender that will change this mindset to compare the crypto to fiat. This is key towards decentralization.
Note working out of the pocket
It is important to note, that while we are dependent on exchange value with fiat, that we cannot place value on crypto for daily living if there is no adoption as legal tender.
I am saying that you cannot put the money you need to survive into a cryptocurrency for this reason on the market. If it is money you do not need right away, then it is value in the future.
For instance, I hold 12,000+ in SPS. If I sold that now it would be at a massive loss. If I keep it for when the price changes, I benefit. It is as simple as that!
If you want to buy and sell for profit on BTC or any other crypto, be my guest. I know nothing about that. Instead all I know is that the market will still be there tomorrow. Therefore, should you have a stake, hold. Some people sell to buy in lower in for more stake. Sometimes this can backfire as you miss the dip.
All I will personally do is hold.
Let's look at the last week quick for BTC...
And the last day...
And indeed we will have to wait and see. There is an uptake, probably due to opportunist buyers and this may really in support again from the people who were panic selling.
Unfortunately there will always be someone playing that game that loses out when they sell low and buy high.
I hope that person is not you, dear reader and I hope you can keep the anxiety mosquitos at bay.
Cheers!