Bitcoin Crash: Is It Time To Get Out?






Bitcoin's plummeting and a whole lot of cryptocurrencies are going down with it. Since early January, we've seen half the market value disappear. Some initially called it a 'bloodbath'. But it's been getting worse and worse. A single coin was once worth nearly $25000, now it's floating under $10000.
Is it time to get out?
That's a real tough question to answer.
The initial idea behind Bitcoin, the 'first cryptocurrency', was to provide an alternative to cash that was decentralized, taking power away from the banks and financial institutions. It was born not long after the Global Financial Crisis hit hard in 2008.
In the past year - and probably more accurately, the last three months - Bitcoin's value has skyrocketed against fiat currencies. This astronomical increase in value resulted in a perfect storm of conditions to push Bitcoin, and cryptocurrencies, into the mainstream. The idea that you could 'get rich quick' meant the technology and ideals behind Bitcoin were quickly forgotten.
When stories started to creep into nightly news programs about people who'd sold everything they owned and transferred it to Bitcoin or the fact that, if you'd bought a few dollars worth of Bitcoin back in 2010, you'd now be a multimillionaireeverybody took notice.
Everybody took notice without even understanding what cryptocurrency really is. People started to buy coins because it was trendy. You overheard them on the train, talking about their Bitcoin and Lambos.
And now we're here. The Cryptpocalypse.
In the last month, cryptocurrency markets have crashed. Hard. Due to falling trade volumes in Asia and the threat of a crackdown on cryptocurrency exchanges, people are cutting their losses. The market is correcting itself.
If you're holding Bitcoin, or if you recently invested, this graph is worrying.

Should you get out now?

Well, first - Lifehacker is not a professional financial adviser, in any way shape or form. We write stories about ways to make your life easier and those stories sometimes involve money.
Second - it's nearly impossible to say if you, personally, should sell. You have to weigh up your options. How much did you buy in for? Are you willing to cut your wins/losses and jump out now? Do you understand the technology and believe it will do good or were you just here to make a quick buck? There's so many questions that are just a matter of perspective. Personally, I've seen a huge dip in my cryptocurrency gains and I have only invested tiny, tiny amounts.
Third - it's a volatile space. One of the issues that the cryptocurrency space is currently dealing with is an influx of fake reports and media that can dramatically alter the price of cryptocurrencies in a matter of hours. Often, this information quickly disseminates through cryptocurrency communities on Twitter and Facebook, which leads to buyer's selling off and the price dropping - even if the news has been computer-generated by a bot in China. The market is just that volatile. It's so volatile that since I started writing this article, Bitcoin is already mounting a mini-comeback - up around USD$1000 (and now back down $300 [it never ends!])
Truthfully, we're seeing all sorts of speculation, refreshing market cap websites, thinking we can see what's coming or what cryptocurrency will be the next to see meteoric rises, but in reality we're all just fumbling in the dark, trying to grab onto a wall and find a lightswitch. No one has found the lightswitch. We can't see what's going to happen.
If you look further back, you'll find that the price of Bitcoin has 'corrected', for want of a better word, to it's pre-media-hysteria levels.
Visualisation of the price ($USD) for 1 Bitcoin from November 2017 to February 2018
The only advice I can really give: Research what you're getting into. Research. Research. Research.
Before you buy any cryptocurrency: Research.
Jackson Palmer, creator of the 'joke' cryptocurrency DogeCoin, penned a long piece about the state of cryptocurrencies on January 12. In the piece he speaks to the idea that cryptocurrencies have deviated greatly from their initial, lofty goals and even speaks about 2017 as 'the year that cryptocurrency stopped being about technologically innovative peer-to-peer cash and instead essentially became a new, unregulated penny stock market.'
Palmer also mentions the old stock market adage: “When your taxi driver is telling you to buy stock, you know it’s time to sell.”
The fundamental changes we've seen in the last month or so - after Bitcoin really skyrocketed - is the adoption of cryptocurrencies for the sake of making money. This has happened in the general population. Some people are buying Bitcoin without ever having read a thing about it. They just don't want to miss out. The FOMO is real. The hype levels have reached highs that may make even Tulip Mania look stupid in years to come.
But all those people that bought in to make a quick few dollars are selling. They have to get out - they bought high and now their dollars are dwindling as the crash hits. Severely dwindling. If you bought 1 Bitcoin for $25000, you've already lost $15000. It's a scary proposition.
Some will stand to lose a lot of money. That's why the top post on r/Cryptocurrency is a link to the US Suicide Hotline.
So to answer the question "Is it time to get out?"
The answer is: Nobody knows but you.
Sadly, if you've invested when the price was high, no one can really tell you what to do. You're probably staring down the barrel of some huge losses. Is it time for you to get out? I wouldn't imagine so.
If you fundamentally believe in the technology, the advancement of Bitcoin as a potential currency that can change how we view 'money' - then you're going to hold.
I'm going to hold.
And, of course, Nick Kyrgios is still a believer:
Love you, Nick Cryptios.
Bitcoin Crash: Is It Time To Get Out? Bitcoin Crash: Is It Time To Get Out? Reviewed by gto1500 on July 02, 2018 Rating: 5

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