Bitcoin At Lowest Point Since The Rally - Should You Sell?
If you followed my and other's advice that is Never Invest What You Cannot Afford To Lose, then you should not be worried. What if you did not listen? A couple things could happen.
1. Bitcoin could go back up
2. Bitcoin could crash further
3. Bitcoin might not go up for a few years again
4. Bitcoin might never return
As for me, I have about 2k in there, which is worth about 60% of that now. That's ok for me. I pulled the 10k I could not afford to lose before I lost it. I plan to HODL until it either skyrockets, or goes to zero, in the first case of which I will pull it when it's worth millions, in the latter case there will be nothing to pull.
I am not worried. Since I am no longer invested in Bitcoin any considerable amount, I am not stressed or worried that it is below 30k now. That's why it was wise to pull it when it did not immediately respond as hoped when Musk invested.
The reality is Bitcoin could have gone higher. A lot higher. It could have been widely adopted. Unfortunately, what really happened is that China crashed it by banning crypto mining in China. Once China crashed it, the world put their plans on hold, maybe indefinitely. At least one country did widely adopt it, but it was a relatively small country in South America.
Without China mining, which was likely the primary reason it was skyrocketing, Bitcoin lost stability and crashed.
What if you still have money in there? What do you do? You have a couple options:
1. Cut your losses now. It's a gamble either way.
2. Hold it and hope for it to return closer to your purchase price, and then sell.
3. Sell only what you desperately need and HODL the rest.
4. HODL it all indefinitely for the long term if/when it ever skyrockets again. Might never happen, this is the gamble you're taking.
I am opting for 4, because I don't need the money I have in there. Whether you pull now depends on how much you have in. If you have your life savings in there, well you will lose a lot if you pull now, but you could lose more if you wait. That decision is up to you, and that is the unfortunate case of what happens when you invest more than you can afford. I and no one else on Earth can give you insight into the future. Anything could happen. It is trending down, but with a market this volatile, you never know what's going to happen.
If you don't pull, you might need to HODL for a few more years. Or, you might get lucky and it goes up. Or, you might lose it all. If you sell, you are guaranteed whatever you sell, AND you can take capital losses as a deduction on your taxes. So, there is some upside to selling in this market, but some risk to selling as well. That's how gambling works.
Investing is different from gambling only when you are putting money in that you never expect to see again, with the hopes that possibly you can increase it one day. For example, investing in a business, the business may fail, and you lose it all, and that's the risk you take. It's a form of gambling, but it's different, because you aren't motivated by big dollar sign false promises.
Gambling is when you are taking an unnecessary risk with money you can't afford to lose. I gambled at first but got lucky when I pulled the 10k at no loss - but no gain either. When I pulled all that I could not afford to lose, I shifted from gambling to investing. Now I have a small amount invested with the hopes that possibly one day it will increase - but I'm also okay with it if it disappears into oblivion.
SUNK COST FALLACY
There is a thing called the Sunk Cost fallacy. Sunk cost is the gambler's Achilles heel. Sunk cost means the money you have already invested. You cannot change the past, and the past does not predict the future with any accuracy.
If you gamble 10k on the stock market and it turns to 5k, a gambler will think that they have 10k in the stock market, and they want to get it back. This is a fallacy. They do not have 10k in the stock market. As the price stands at half in this scenario, the gambler only has 5k in the stock market. The first 5k is GONE. Period. There is 5k left. What should you do with it?
The correct thing to do is look at what you definitely have left, which is 5k. Then make the decision accordingly as if you never invested 10k, because 5k is definitely gone now. You only have 5k left.
So, would you invest in the market that 5k that remains TODAY, if it was not already in there?
- No? Then pull it.
- Yes? Then keep it in there.
This is the correct thing to do. Cold, calculating, unemotional, and truthful with yourself. You no longer have what you invested. You have whatever is there NOW. Now you make your decision based on what you really have. The rest is a "Sunk Cost".
Don't fall into the trap trying to get your original investment back. It's already gone. Only what you have in there NOW is what you have, and not a penny more. IF it goes back up, you have invested this amount by leaving it in. Your original amount is irrelevant. Completely irrelevant. Terminate any emotional connection to your original amount, because that amount is nonexistent now. You only have what you have right now.
Be an investor. Not a gambler.
Learn from your mistakes.
And don't make those same mistakes again.
I hope this helps you.
1. Bitcoin could go back up
2. Bitcoin could crash further
3. Bitcoin might not go up for a few years again
4. Bitcoin might never return
As for me, I have about 2k in there, which is worth about 60% of that now. That's ok for me. I pulled the 10k I could not afford to lose before I lost it. I plan to HODL until it either skyrockets, or goes to zero, in the first case of which I will pull it when it's worth millions, in the latter case there will be nothing to pull.
I am not worried. Since I am no longer invested in Bitcoin any considerable amount, I am not stressed or worried that it is below 30k now. That's why it was wise to pull it when it did not immediately respond as hoped when Musk invested.
The reality is Bitcoin could have gone higher. A lot higher. It could have been widely adopted. Unfortunately, what really happened is that China crashed it by banning crypto mining in China. Once China crashed it, the world put their plans on hold, maybe indefinitely. At least one country did widely adopt it, but it was a relatively small country in South America.
Without China mining, which was likely the primary reason it was skyrocketing, Bitcoin lost stability and crashed.
What if you still have money in there? What do you do? You have a couple options:
1. Cut your losses now. It's a gamble either way.
2. Hold it and hope for it to return closer to your purchase price, and then sell.
3. Sell only what you desperately need and HODL the rest.
4. HODL it all indefinitely for the long term if/when it ever skyrockets again. Might never happen, this is the gamble you're taking.
I am opting for 4, because I don't need the money I have in there. Whether you pull now depends on how much you have in. If you have your life savings in there, well you will lose a lot if you pull now, but you could lose more if you wait. That decision is up to you, and that is the unfortunate case of what happens when you invest more than you can afford. I and no one else on Earth can give you insight into the future. Anything could happen. It is trending down, but with a market this volatile, you never know what's going to happen.
If you don't pull, you might need to HODL for a few more years. Or, you might get lucky and it goes up. Or, you might lose it all. If you sell, you are guaranteed whatever you sell, AND you can take capital losses as a deduction on your taxes. So, there is some upside to selling in this market, but some risk to selling as well. That's how gambling works.
Investing is different from gambling only when you are putting money in that you never expect to see again, with the hopes that possibly you can increase it one day. For example, investing in a business, the business may fail, and you lose it all, and that's the risk you take. It's a form of gambling, but it's different, because you aren't motivated by big dollar sign false promises.
Gambling is when you are taking an unnecessary risk with money you can't afford to lose. I gambled at first but got lucky when I pulled the 10k at no loss - but no gain either. When I pulled all that I could not afford to lose, I shifted from gambling to investing. Now I have a small amount invested with the hopes that possibly one day it will increase - but I'm also okay with it if it disappears into oblivion.
SUNK COST FALLACY
There is a thing called the Sunk Cost fallacy. Sunk cost is the gambler's Achilles heel. Sunk cost means the money you have already invested. You cannot change the past, and the past does not predict the future with any accuracy.
If you gamble 10k on the stock market and it turns to 5k, a gambler will think that they have 10k in the stock market, and they want to get it back. This is a fallacy. They do not have 10k in the stock market. As the price stands at half in this scenario, the gambler only has 5k in the stock market. The first 5k is GONE. Period. There is 5k left. What should you do with it?
The correct thing to do is look at what you definitely have left, which is 5k. Then make the decision accordingly as if you never invested 10k, because 5k is definitely gone now. You only have 5k left.
So, would you invest in the market that 5k that remains TODAY, if it was not already in there?
- No? Then pull it.
- Yes? Then keep it in there.
This is the correct thing to do. Cold, calculating, unemotional, and truthful with yourself. You no longer have what you invested. You have whatever is there NOW. Now you make your decision based on what you really have. The rest is a "Sunk Cost".
Don't fall into the trap trying to get your original investment back. It's already gone. Only what you have in there NOW is what you have, and not a penny more. IF it goes back up, you have invested this amount by leaving it in. Your original amount is irrelevant. Completely irrelevant. Terminate any emotional connection to your original amount, because that amount is nonexistent now. You only have what you have right now.
Be an investor. Not a gambler.
Learn from your mistakes.
And don't make those same mistakes again.
I hope this helps you.
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