If you think a crash in the crypto space is coming, then you should think again. If you get nervous when you see the charts all red, then you should not be anxious when you see it green. Cryptocurrencies like every other asset will always experience pump and dumps. During these pump and dumps, the losers are amateur investors/traders who follow suit and dump without a perfect plan. Some dump at a small profit margin hoping to buy back later at a low but never get to see the low while others dump at a loss and get even more looses when they decide to buy back later. The winners turn out to be amateur and experienced traders/investors who HODL.
Reasons why you should HODL
Firstly, if you are not an experienced trader or if you don’t have a good buyback plan, then selling to buy at a dip might just be selling for a few pennies which might result to you regretting the decision in the future.
Secondly, many institutions but financial and governmental are getting on board the ship. Yesterday alone, Goldman Sachs joined the other financial institutions already on board. Governments are not left behind as the EU, the US, China and S.Korea have in one way or the other regulated Bitcoin and Cryptocurrencies. If you ask me, I would say its all FOMO as no one wants to be left behind on what they can’t stop.
Also, we have seen worst drops in the crypto space but were all followed with major bounce backs. Remeber we have seen ridiculous growths the past weeks and only saw minor corrections, a major correction won’t kill anyone who is not only in for the profit but also believes in the underlying technology.
Furthermore, this is Xmas period and it won’t be uncommon investors and traders taking out some profits for their Xmas expenses. This doesn’t mean they won’t be joining the train after new year which we can expect to see the prices take off again.
Finally, more and more people keep joining the crypto space and before the current correction, we saw the market cap of cryptocurrencies hit $ 650B plus. The market cap was at less than $ 350B just a few weeks ago. With the increasing media coverage and institutions joining in, we are seeing mainstream investors getting on board too.
Tip in crypto investing
Diversify your investment and make sure you have some holdings in the top coins. Also, try reading the white paper of each coin you invest in to see if it actually adds value or if its just a copy of Bitcoin or Ethereum or some other coin but has no additional value. But just remember to HODL because great times are surely on the way.
Nevertheless, with the thousands of coins on the market, some will not stand time and we can expect some to be going out of the market within the coming months and weeks.
What do you think of these reasons and tip? if you have other reasons why we should be holding cryptocurrencies of tips, please let us know in the comment section below.