Why the Cryptocurrency Christmas Dip wasn’t a Crash
If you were one of the lucky ones who were able to buy cryptocurrency this weekend during the Christmas dip, then congratulations! Many crypto non-believers have been saying that there’s going to be some sort of crash or a Bitcoin bubble is going to burst. That’s just not the case. What did happen this past Friday morning is what’s called a price correction. In recent months Coinbase and exchanges like Bittrex and Binance had an influx of new users/investors coming into the market and buying every coin they could from them. The overload on their servers and the need to hire tons of new employees / train them, was too much to handle. To top things off, these newbie investors didn’t really understand the values behind each coin.
Case in point: Litecoin LTC should have never gone up to $300 so quickly.
Once the prices soared, big players in the market (investors, bulls, people with big holdings), started to pull out some profits which made the prices of a lot of coins go down (or dip) in value very quickly. Then all the new investors started to panic sell because they thought they were going to lose all of their money. But because they did that, the dip went a lot lower than we expected. For example, Ethereum (ETH) was at $465 for a split second on Friday morning around 8:30 AM on Coinbase. It quickly jumped back up to $506 and kept moving to the $600 range until it around $750, and then settling around the current $650 range. This just proves to you that there is no crash, that it is simply a dip, and it is actually the fifth dip of the year because we’ve already had four other ones.
Make sure you do your research by looking at the charts on CoinMarketCap.com, the trends, the historical data, the price analysis, and make sure you do your research on every single coin. Data driven decisions is the best way to choose the next step in all tech companies whether crypto, or Internet. Since cryptocurrency is so volatile, you have to expect the highs and lows during growing pains.
The best advice I can give you is to prepare yourself for those dips. Technically, you want to buy a coin when the price is low, and if news comes out about a coin partnering with a big company, be ready to sell to make a profit. But if you are like me and a lot of others in my close circle, we don’t normally sell. We HODL. Which means we Hold On for Dear Life (it’s a crypto term started in a Reddit post).
We plan on holding our assets until at least the year 2021.
This is when we think the cryptocurrency market should have reached a certain degree of mass adoption. I know this sounds like a broken record, but when you first get into crypto, only invest a couple hundred dollars, create accounts on different websites and exchanges. Once you get comfortable trading ETH and BTC for altcoins, then you can start investing a little more money. But don’t put too much in, because if you lose it all right away you will be upset and you won’t want to invest in cryptocurrency anymore. You might have bought one of the top 10 coins before the dip, say an ETH for $850. Then the dip happened and you lost some money. But did you? Sometimes you just keep have to keep calm and hodl.
Some say crypto has no value, or that all the blockchains could just crash down. Did that happen to the Internet? Or did several amazing companies emerge such as Amazon, Apple, Microsoft, Google, eBay, Facebook, etc., and the rest died off. This could be a second iteration of the Internet, albeit a decentralized version. That IMHO has a ton of potential to give us a simpler, faster, and cheaper solution to a lot of the worlds’ needs.
So take your time, crypto currency is here to stay, just have fun with it and do your research!
Originally published at crypto.jasonsherman.org on December 24, 2017.