I am very new to crypto. Although I have been following the evolution of Bitcoin for a little over a year now, I have only invested my first money on January 14th, at around 9:30 p.m. Why do I remember so well, you might ask? Well, on January 14th at 10:00 p.m. the entire cryptocurrency market slumped in one of the biggest crashes in crypto history. As a long-term skeptic who had only just recently accepted the undeniable use cases for crypto, you can imagine what my reaction was when I woke up the next morning to find that 15% of my money had just vanished. It went along the lines of “F*ck this s*it”. But you know what I did? Nothing. Since that first day, I have not touched a single coin or token. All I have done is throw more money in, trying to buy the dip (which, naturally, always turned out to be nothing more than an ephemeral layover on our way to new lows). But compared to 1370$ I originally paid for my Ether, it has only been bargains for me since.
As a newbie, how did I survive this toxic birth? Crypto had just kicked me right into the fiery pits of Mount Doom, given me the dreams of Lambo’s and moon travel only to look me dead in the eye and say “Nah uh, not you”. Any sane person with a skeptical background like I had would have seen that 15% drop over a 12 hours period and started their attempt at damage control. There are a few reasons that I didn’t:
I invested what I was willing to lose
This might seem strange to some people, their reaction often being: “Well, I don’t want to lose anything”. Obviously, nobody wants to part with their hard-earned cash. That is not the point though. The point is that your reaction to fluctuations in the market will be very different depending on whether you have invested a couple of hundred bucks of disposable income every month, or your kid’s college fund. Whenever that twenty or fifty or eighty percent crash comes, your reaction will be much more emotional if you have your life savings in crypto. Remember, you haven’t lost a dime as long as you don’t sell at a loss.
My faith in the underlying technology was unchanged
The next important aspect for keeping your cool is the necessary understanding of what you are investing in. A lot of people just want quick money. They see a coin grow, they want a piece of that and they invest. For them, it doesn’t matter what the underlying idea is, it’s just about the money. That’s not a good position to be in whenever you are experiencing dips. If you understand and believe in the technology, you know that, in the long run, it will come back. The day-to-day price is influenced by so many non-fundamental things that it can be misleading. Just make the right decision when you first invest and stick to it.
I understood that, by selling, I would just play my part in worsening the dip
I am an ideologue. Money to me is a bonus, not the end goal. My goal is to be part of the creation of something greater than myself, something that I have faith will change the world. The dip we just experienced was weeks long with pretty clear signs from the beginning that it would not end any time soon. I could have sold and re-bought at a lower price to minimize losses. But I didn’t. Why? Because then I would have been part of the problem. The dip is people selling their coins. If everybody sells their coins, crypto is dead. We need a hard-core of dedicated people, ideologues who are in it for the technology, to weather these storms.
So don’t worry about the bears in the market, those who bet on the downfall of crypto. Don’t worry about the, very real, fake news coming out on a regular basis. Have faith in crypto. In the words of the great Charlie Chaplin, in his iconic role in The Dictator:
“To those who can hear me, I say – do not despair. The misery that is now upon us is but the passing of greed – the bitterness of men who fear the way of human progress. The hate of men will pass, and dictators die, and the power they took from the people will return to the people.”
At the end of the day, even if I lost the money I have invested so far, even if all of it would melt away like a brick of butter you left out on a hot summer day, it wouldn’t make a difference in my life. I invested disposable income, those 20 beers and that new pair of shoes I wouldn’t need anyways. But in return I participated in the growth and evolution of a technology that has the potential to change human society for centuries to come.