During the Christmas Weekend in the Philippines, many are probably caught off guard by the massive bitcoin plunge which started around December 21 – 22 and continues as of today.
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While no one can predict exactly why this is happening, one major explanation is the rise of Bitcoin Cash. Several prominent people in the crypto-community tout it as a better alternative to bitcoin. Roger Ver, once called the Bitcoin Jesus for promoting the cryptocurrency now implied that people should keep their money in exchanges so that they can sell their bitcoins fast, in favor of bitcoin cash.
Or maybe it’s just coming back to reality. It is obvious that bitcoin’s upward trend in value had been very fast:
Something that goes up 150 percent in less than a month is probably going to have double-digit retracement. – Mati Greenspan of Etoro
A correction – something that happens to a price of a product when it rapidly goes down or up. At some point, it will regulate and the market (of buyers and sellers) will settle on a certain price point.
What should we do with our bitcoins?
Bitcoin has two obvious purposes. The first one is to facilitate transactions without the middleman. The second is to become a holder of value.
At some point in the last few weeks and months, bitcoin holders face rapidly increasing transaction fees. This probably prompted many to hold their bitcoins. And indeed the value had gone up, so people keep holding on to their bitcoins.
But now, the market is correcting. Bitcoin will soon settle on a certain value point. What should bitcoin holders do?
There are two possible things you can do:
- Sell it
- Hold it
Depending on how much pesos you exchange for your bitcoins, if your buy point is still cheaper than the current price of bitcoin, then it can still make sense to sell it.
There may be some of us who will fear that the value of bitcoin will continue to fall down. This, for them, it might make sense to sell the coins while there’s still value left.
Nothing stops you from pursuing that path. However, it will be a bad cryptocurrency advice. Bitcoin’s price has plunged in the past. And it recovered with astronomical value in 2017.
What’s more, you should not have invested in bitcoin just because you know someone who made money from it. In the first place, you should have invested because you believe in the coin’s mission – to facilitate transactions and hold value. If you still believe in those, then it makes sense to hold onto your bitcoins for now.
Other things you can do while holding your bitcoins:
Read the original bitcoin whitepaper
The original bitcoin whitepaper is very easy-to-read at 8 pages long. It represents the reasoning behind the creation of bitcoin, how and why it can facilitate transactions, among other things. Check the bitcoin whitepaper here.
Invest in your financial literacy
While we hold our bitcoins, it’s time to learn more about personal finance as a whole. How to invest in the stock market, how to save money, how to understand stock exchanges, finance terminologies. Knowing these things will put you two steps away from the person who bought bitcoin simply because of its price.
According to Mike McGlone, an Intelligence Analyst at Bloomberg, bitcoin is the mainstream but is not the best representation of blockchain technology. He said:
Bitcoin is the crypto benchmark, but not the best representation of the technology. Altcoins should continue to gain on bitcoin, which has flaws – Mike McGlone
Before you invested in your first bitcoins, you probably knew already how volatile cryptocurrency is. If you accepted this risk, then this bitcoin price drop should not put a dent in your morale. If you have followed the old crypto advice – “Invest only what you can afford to lose“, then this plunge should also not put a dent in your well-being. For new bitcoin personal investors, this event will test your risk appetite and everything you have learned about cryptocurrency.
But right now, it’s time to take a little backseat. Read a book or articles about bitcoin or cryptocurrency. Begin learning more about it. If you are one of those who did not start reading before you invest, today’s probably the greatest day to begin doing so.