For many, 2017 can be considered a success for cryptos. For years, many were looking to see cryptocurrencies in the mainstream. Bitcoin going from $1,000 to near $20,000 is considered by many as the epitome of crypto’s potential. And for this reason, there are those financial institutions that already want to have a piece of the action despite the volatility of the industry.
A few months back, Bitcoin even showed low volatility by staying around $6,200 to $6,500. Many believed that it is a sign of maturity. However, there are those who pointed that it can be a bull or a bearish trend waiting to happen. But after last week’s Bitcoin Cash hard fork, all major cryptos are bleeding. At this point, it begs the question of whether you should HODL your Bitcoin or you should start selling to minimize losses.
Ifyou are going to ask Ramit Sethi who is the best-selling author of “I Will Teach You To Be Rich”, he believes that crypto holders had a bad investment strategy. He thinks that crypto investors who HODL use their emotion in their decision.
The Tendency to Withstand Losses
According to Sethi, he finds it problematic when crypto investors demonstrate investing in a market that doesn’t seem to recover any time soon. According to him, it is a classic situation wherein rational investment practice is not being made. For Sethi, he compared the situation to people who double down on their support for politicians who were exposed for their bad behavior.
$700 Billion Lost
During the peak of the crypto market’s market cap, it was able to go as high as $830 billion. But after the 2018 bearish market, it has lost $700 billion. And the more recent turn of events was caused by Bitcoin Cash splitting into two, which is an event known in the crypto niche as a hard fork.
Forks are usually software upgrades. However, this time around, those within Bitcoin Cash didn’t agree. And because of this, Bitcoin ABC and Bitcoin SV were born. The latter is started by Craig Wright who claims that he is Bitcoin inventor Satoshi Nakamoto. The initial effect was Bitcoin dropped below $6,000. And eventually, it dropped to $4,300.
But Bitcoin isn’t the only one that has been affected by the bearish market. Ethereum and Ripple were also affected by the price movement. However, it is also true that institution partners made by Ripple’s team saved XRP from losing more during the crucial week.
Buy, HODL, or Sell?
He believes that the identity of those who are investing in Bitcoin made them believe that they should be holding on to their cryptocurrencies. He said that “I don’t mind identities. I have a few of my own: Personal finance guy, Gym rat, hot sauce fan. But be extremely cautious about the messages you tell yourself because once you internalize it, you’ll do anything to justify your choices”.
And he might be right all along. We may never know when the crypto market is going to recover. Can institutional investors save the bearish market? Or perhaps, even institutional investors are now pickier when it comes to investing in crypto?