Now that the price of Bitcoin is through the roof, a legion of new investors has finally decided to invest. When the price was through the ground, they did not buy. But now they do want to buy. The skeptics of a cheap asset, today are believers of a much more expensive asset. Why now and not before? Well, because the new investor is carried away by what others say. Then the new investor is seduced by pretty headlines. And he is very prone to illusion. It assumes that if the price has been going up, it will keep going up forever. The enemy of the investor is emotion. Greed. The fear. How to invest in Bitcoin with the price through the roof and survive the attempt?
Now, as a general rule, the ideal is to buy low and sell high. In other words, buying undervalued assets and selling overvalued assets. That is, buy from the pessimists and sell to the optimists. Understanding that bull markets are born out of pessimism, grow in skepticism, mature in optimism and die in euphoria. The amateur investor frequently fails, because he usually enters the period of euphoria. It is too late. And because he is the last in line, he buys close to the maximum. Which usually means you buy shortly before the crash.
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Why does the amateur investor buy expensive? Listening to the success stories of others. In other words, you buy out of greed, not because of collateral. The FOMO invades him. And you don’t want to miss the bus. In the past, he did not buy, because there was a lot of uncertainty. And he did not have the courage to invest in the face of so much risk. For this I wait until I am the last. Buy in euphoria, because you need everyone’s validation to be able to invest. But deep down, he doesn’t know what he’s doing.
This is an endless story. It is the easiest way to lose money. What usually happens is that you buy in a fit of greed at a high price under false expectations and then sell too soon out of desperation. This is how money is lost in this space. As simple as that. You buy too late and sell too soon.
Of course, it is never easy to know the true value of an asset. The price of Bitcoin has certainly risen quite a bit lately, but it may continue to rise. Which means that someone can buy today and still make money from future increases. The current trend is clearly bullish. And not buying now can mean the loss of a great opportunity. Although it is true that the asset is quite expensive in relation to its past price in the coming months, it can become even more expensive.
People who bought Bitcoin in previous years can sell a little bit at each rally to build up fiat in a fund. This fund is a preparation for the upcoming bear season. In this way, it grows during the bullish period, but with some stability. And there is enough liquidity to buy again in the event of a possible price drop. Obviously old-time investors have a great advantage over new investors. They bought cheap. Then, the fluctuations of the price do not affect so much because they are always in profit. That is, a drop to $ 40K is not that important to the person who bought at $ 3K. But it can be quite painful for the person who bought at $ 58K.
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Now, the point is that we do not know precisely the exact duration of this bullish period. It can last two more years. Or it can end tomorrow. Everything seems to indicate that we will have rises for a longer time due to the macroeconomic factors at play. There are many models that tell us that the price of Bitcoin will hit $ 100K or more this year. Some even talk about much more. In fact, there is talk of $ 400K per unit in the near future. This can be true in case the current trend holds. And indeed, it is likely to remain. However, it is not a bad idea to design some kind of plan B in case the trend does not hold.
Suppose there is mood and you decide to buy Bitcoin for the first time right now. Obviously there is optimism. It is assumed that the price will continue to rise, but it is also possible that things will not go according to plan. It is best not to go crazy. If Bitcoin falls in price, the ideal in that case is not to panic and buy a little more. That is the importance of never running out of fiat. Falls are very good news for the buyer. So, in the face of falls, you have to become a buyer. Never in a seller. It is never sold below the purchase price. So a thousand years go by. It is never sold below the purchase price.
You have to invest with strategy. Not with emotion. Relying on predictions is a form of emotionality. It is a trap to buy thinking about the predictions. The idea is to accumulate coins, wait the necessary time and only sell (in case of selling) above the purchase price. The rest is nonsense. Will it hit $ 100K this year? Silly stuff. Do I buy, sell or keep? These are the only three valid questions. These are not predictions. It is about strategic action.
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It is possible to buy now with these prices through the roof. But it must be done without false expectations. It must be bought with the willingness to wait for a long time, understanding that markets fluctuate. That is, the bull period may continue for longer, but it may also not last much longer. In both cases, you have to be prepared. In short, you have to buy being patient.
In December 2017, many bought at high prices under false expectations. Back then, it was all optimism. And the predictions were quite encouraging to new investors. Greed invaded the market and many bought with great enthusiasm. However, the price took a nosedive and many lost money. Why? For buying expensive and not knowing how to wait. The impatient are the first to panic. Patients, on the other hand, sooner or later collect the prize.