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December 28, 2017, 12:12:14 AM |
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Many have been predicting these price rises for a long time. I was expecting it, just not so soon. The 2017 rise started in may or so and is, as far as I can tell, due almost entirely to institutional investors such as hedge funds entering the market. Not too long ago a 10k buy/sell would move the entire market. Now we have BILLIONS of dollars flowing in and a finite supply. Many holders are not selling yet.
I want to stress how important it is to only buy if you understand what it is and want to hold long term. Then follow that by not paying attention to any mainstream articles. I see stuff on a daily basis that is factually incorrect. Yesterday I saw a documentary on netflix, the description said "Blah blah blah it is 100% anonymous" or something like that. If you don't know why this is wrong, you should't buy any. And you certainly shouldn't make a documentary about it. So many articles proclaiming the death of cryptos or predicting a price of x by a date of y are written by people who clearly don't know anything about bitcoin. But they will write FUD because we click on it.
The problem is that people see this stuff and panic. What if you bought at 18k, then the price drops to 12k, and you see all of these articles that are out about the bubble bursting? You get scared and sell. But these articles are written by idiots and charlatans. If you don't know enough to know that a 50% price swing is not unusual, and why it is not unusual, then don't buy any. Because when you do the price will drop by half and you will panic and sell, losing tons of money in a short time.
Don't listen to these articles, ever! Decide for yourself.
I had a good laugh last week when I clicked on an article about the death of bitcoin. The punchline was when I saw that it was declared dead because the price (bubble) had plummeted from $300 to $100. Ha! Yes the bubble had burst, I bet the idiot who wrote that is glad they didn't buy any!
I'll tell you a well known secret: buy when every one is selling and sell when everyone is buying. The more fearful people get, the more opportunities I see. The more exuberant they get, the less I see unless I already own, in which case it tells me it might be time to lock in some gains. The thing that really mystifies me is that it happens over and over and over again, every year. The history and data are there but you can't change psychology. Even professional traders sometimes fall victim to it. If you can avoid emotional investing then you are already one step ahead of the competition.
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