The crypto world has been rocky over the past month or so, as unexpected fluctuation, prolonged dips, and the eruption of Bitconnect platform has had investors and traders alike running around like headless chickens. Now it seems like the new money and hype that sent Bitcoin rising to astronomic levels in December is also about to come crashing down.
Bitcoin Market Correction Imminent
Many of us knew Bitcoin, and the rest of the crypto world, was in for a solid market correction. The rapidly growing perceived value of crypto that we saw through most of Q4 2017 was destined to be sent back to Earth at some point, and it looks like we’re about to see it. A few days ago, after already having a rough week, Bitcoin fell below the $10,000 mark, settling around $8,800 for the first time since November. Many experts are saying that it may dip even further in the next couple of weeks, as Bitcoin corrects itself back to the levels it was at before it began to grossly inflate.
Despite people losing their heads over this, we needed this to happen for the sake of crypto. Market correction is a sign that everything is still working properly, and better reflects what Bitcoin is actually worth. We may be entering a period of doubt in crypto as a platform, since a lot of newbies and “weak money” jumped on board and are now burnt. This is coming on the heels of attempts to regulate Bitcoin, as well as protect people from further Bitconnect-like scams. There is a possibility Bitcoin, along with the altcoin market, could sink into relative obscurity again. This would be incredible, as it would once again attract smart money and long term investors.
Facebook Cracks Down on Crypto
Part of this market fear has been driven by the recent development that Facebook will be disallowing any paid ads on its platform that have anything to do with cryptocurrencies, Bitcoin, or anything related. This came as a shock, especially since one of the newest marketing strategies for entrepreneurs has been to sell courses related to crypto trading and various kinds of investment groups. These kinds of services were just beginning to get off the ground, but it looks like that effort will be stymied for the time being.
That Facebook took such critical action likely has a lot to do with the fallout from Bitconnect, as many unscrupulous investors and crypto “gurus” were using paid ads to rope people into buying into it, and I’m sure Facebook took heat for it. This huge dip and fear surrounding it is less an indictment of crypto and more so evidence that the social media ad platforms are beginning to get exposed. The various exploits and bizarre marketing tactics that have been the hallmark of platforms like Facebook and Youtube are coming under more and more fire lately. Quite simply, people have had it with being bombarded with blatant spam that’s being passed off as “quality advertising” just because some marketer can throw a lot of money around.
This is somewhat reflective of the crypto world, which of course has had a major problem with scams for years. Bitconnect is perhaps the biggest, though there most certainly have been others. The result has been great fear for a lot of people both new and old to the crypto scene. These kinds of services muddy the water, and create doubt where there shouldn’t be. This results in money leaving the cryptosphere and thus plummeting prices.
The Crypto Correction Was Needed
This massive dump of crypto was definitely needed however. I know some of you who are big on crypto and who jumped in this past fall must be shaking your heads, but the fact of the matter is, gross inflation is never sustainable. For Bitcoin and all of the other good crypto to survive and thrive, the “weak” money and the scams need to be weeded out. Once the new baseline is established, smart money is going to trickle back in, and you’ll see a steady, but more realistic rise in Bitcoin’s worth.
This is important. Those of us who understand crypto expected and anticipated these growing pains. People all over social media are going ballistic and are claiming crypto is a scam, they’ve lost their fortunes, they’re in debt, and all kinds of other wild stories. Well, this is fear, uncertainty, and doubt talking. To be honest, you don’t even really need to do anything during this big dip. Just HODL and in a few months, Bitcoin and the rest of your favorite altcoins are likely to be right back where they were in December. Even if they aren’t wait a year, you’ll be pleasantly surprised.
It’s not some race to the top. Bitcoin is supposed to be a functional asset to society, not some arbitrary monetary number like a stock. If it has intrinsic value, the market will price it as such, and if past years have been any indication, Bitcoin and crypto in general is most certainly going to rise in price. We could only be seeing the tip of the iceberg.
The important part to remember is that, if you took a hard loss in the crypto dip this week, don’t think of it like a stock. If you think of crypto like a stock, you’re confused and probably shouldn’t be investing in it. Right now Bitcoin is merely correcting itself. The first rule of crypto is you shouldn’t have money in it that you wouldn’t mind losing anyway, that way if anything happens, you don’t have to worry about anything. That being said, people act like it lost intrinsic value or is “failing” or something.
Hate to break it to these people, but that’s not how crypto works. You’re not “investing” in a company or body, you’re trading USD for another currency. One that is in limited supply and has high intrinsic value. Once the fear lowers and more institutions adopt Bitcoin, its worth is going to rise once again. If you happened to buy into Bitcoin at $19,000, you probably jumped on the hype train or were given poor advice. But it’s not like you’ll never see that money again. Bitcoin is most definitely going to go up to $20,000 and beyond again. Might not even have to wait a year. Whatever you do, don’t settle for a loss. Just HODL and believe in the platform. Crypto exists for more reasons than traders trying to make a quick buck. It has purpose and is designed to fulfill various niche roles in society, thus giving it a hard value. If the value is there, so will the money.
Do the research and don’t despair. You want to know what the smart money is doing right now? Buying more Bitcoin.
If You’re Serious About Crypto, Buy the Dip
I can’t stress this enough. By all metrics and accounts, we know Bitcoin and most other solid crypto are going to reach heights far above what they are worth right now. All evidence suggests Bitcoin, for example, will reach unheard of numbers even later this year. That means, smart money isn’t bailing on it, it’s buying more up.
This dip has afforded smart investors the chance to buy Bitcoin at a dramatically reduced price. Could it dip a bit lower? Perhaps. Some people even speculate it could dip back below $5000 for a while, echoing its relative price before it really began to moon last fall. This might even be expected, but right now it’s hard to say. What we do know however, is that regardless of how low it may go, jumping in and buying up more Bitcoin right now is not, in any way, a dumb idea. This is when the real investors smell blood and buy up their favorite coins at dramatically reduced prices, which usher in the start of its next rise. You could do nothing in this period and just wait out the dip, or you could become a member of the smart money crowd and get even more Bitcoin than you already have.
In case you are new to the crypto world and all this chaos has you wondering if Bitcoin is some kind of scam or something, rest easy. It’s crucial that you make a distinction between the scams that do exist within the crypto community, and crypto itself. Lending and interest-based platforms pop up all of the time, but history has shown most of them to be suspect. Right now the best form of crypto investment is to simply buy it up and hold it. Right now is a perfect opportunity to do that.
If you have already been bitten and have “lost” money in Bitcoin, you might need a change in perspective. You didn’t lose any money (and if you put so much USD into Bitcoin that you can’t pay your own bills or something, you shouldn’t be investing money in the first place). The point is, since we all know Bitcoin’s value, its market price will be going back up. This means, from a smart money point of view, you should be buying more right now. When all of this market fear fades in a couple months, you’re going to be reaping the benefits.
Stock Markets Tumble – What This Means For Bitcoin
No question, the stock market is inflated right now. There are some signs that the bubble may be close to bursting, especially after the tumble stocks took this week. While the market may recover in the short term, there is little reason to doubt that within the next year or so, the market will inevitably correct itself and the economy will enter another recession. Wealth is being siphoned from the poor and middle class at unprecedented rates, and this stagnates the transfer of money, which is what moves the economy. World events as they are, also contribute to fear in the market, causing wealthy investors to withdraw their money.
So where does this leave Bitcoin?
Well, crypto in general was designed in part to be a hedge against fiat currency. Though in the last few months there has been a lot of talk of Bitcoin being regulated, and it becoming more “mainstream.” Of course financial institutions would want to get a piece of the pie – but this doesn’t change Bitcoin’s original goals or purpose.
If the market gets rocked, crypto will take a similar hit, so be warned. But this is in the short term, because right now there is institutional money wrapped up in the crypto market. Once this money leaves and USD goes back to “recession standards,” you’re going to see a huge pull into Bitcoin and other crypto, because it will be considered far more reliable than the dollar. There is also a good chance that we’re not long from seeing Bitcoin “lauded” as an alternative to fiat. This has already happened in crypto circles, but once another recession strikes, people are going to be turning their gaze to other forms of value.
The best course of action is to invest in crypto now and stay on board even during the dips and lulls. Once Bitcoin is further legitimized through the failures of fiat currency and the instability of the markets, its value may explode exponentially.