The world is in major panic mode right now. Everybody and their mother is selling their Bitcoin and altcoins, following tons of rumors, smack talk and real action taken against cryptocurrencies that happened lately.
For those who haven’t been following the news (although I doubt there are any cryptocurrency fans who don’t), here is what happened in September alone. It was basically hit after hit after hit straight to Bitcoin’s chin and the results echoed in all other coins:
– One week later, rumors regarding Chinese exchanges being shut started to surface. This caused MASSIVE panic over the world and prices started to drop.
– Charlie Lee, a true cryptocurrency celebrity and creator of Litecoin, tweeted that he has confirmation from trustworthy sources that the ban on exchanges is indeed coming. He later on deleted that tweet but this lead to even more panic selling, even though his advice for his followers was to hold on the coin.
– Jamie Dimon, the JP Morgan chief executive, considered that it’s the best moment to call Bitcoin a “fraud” that will blow up. Not sure how much effect this actually had since there were already so many things going on, but it didn’t help, that’s for sure!
– Finally, the oldest cryptocurrency exchange in the world, Shanghai-based BTCC announced that they will close down China-facing trading on September 30, 2017 and already stopped taking in new members. However, their international exchange will continue to operate normally.
A lot of hits that poor Bitcoin had to endure, wouldn’t you agree? And these are just the major ones – I am sure that there were more and most likely a few more will come in the near future from those who oppose the power masses are getting from cryptocurrencies and the fact that they threaten the existence of banks and money transfers as we know them.
As a result, the Bitcoin dropped from an all time high of $5,000 earlier in September to a low of about $3,000, returning to early August value.
Why are people selling?
You have to think about an extremely important thing: at the beginning of 2017, Bitcoins were sold for less than $1,000 a piece. In early 2016, you could buy Bitcoin for under $400. This means that many people are making humongous profits even if they are selling for $3,000.
Don’t look at the drop from $5,000 – which is massive and not encouraging, for sure. Look at the fact that since the beginning of the year, at the current exchange rate, Bitcoin still TRIPLED in value. If you bought last year in September, you’d still have 5 times more money if you sold today!
But all that matters in the end is this: big profits are being made from selling. Sales are being made not only out of fear, although I do understand that many people in China are selling out of fear because they worry they’ll get stuck with currencies they won’t be able to turn into real money – which is not true! So sales are not made only out of fear, but for massive profits as well.
The trend is, for a while, going down. There are voices who claim that Bitcoin will go as low as $2,700 – some say that it will go down more. The smart investors consider that a way to make nice profits: why not sell at $4,000 or at $3,000, if you know that you’ll be able to buy for a much lower price – and you have already bought for way less?
So right now, that’s what is happening: some people are selling out of fear while the crypto world takes hit after hit from various sources. Some people sell to make profits or with future purchases in mind, which also drives the price down. Some, who got in late, like I did, hold on their coin waiting for the recovery. And others are just taking the loss and moving away.
But this is not the end
I got very late in the game, when BTC was priced $4,600. I can’t describe the horrible feeling I have when I look at my portfolio today and I see that I am about 40% down.
Basically, I have invested $2,500 a bit over two weeks ago and now I already lost $1,000. That is very bad business!
I seriously considered taking it to the chin and sending a big middle finger to the cryptocurrency world. It was horrible, a bubble that burst open, a bubble that I got into late and lost money.
But then I spent time thinking about everything I wrote above. This drop is temporary because of two main reasons:
1. Those who sell to make profits will buy in large quantities at a given point. The won’t risk waiting for too long because others might rush in to make the big purchases before they do, skyrocketing the prices.
2. The concept of Bitcoin and all the great coins out there are really outstanding. It’s not a scam – there are actual products that will change the world forever. And this is why not only they won’t be killed, but they’ll get back to the growing trend and keep growing… eventually.
Those who believe in Bitcoin and all the other great coins out there know that. More and more big firms and companies and important people in the world are starting to use it or they plan to use it. Here are just a few recent examples:
– Microsoft is backing up cryptocurrencies and they are already working on products or support
– OMG has partnered with Apple just recently
– various banks are planning out to create their own altcoins
– you can pay taxes with Bitcoin in a few cities in Switzerland
– you can buy luxury houses with Bitcoin in Dubai
– Russia is rumored to be planning to offer electricity subventions for cryptocurrency minining
And there are more and more examples of similar things happening over the world. This is a technology that is indeed taking over. It had a slow start then it got a massive boost. Now people, institutions and governments are trying to get some control back.
And that’s not necessarily a horrible thing to happen.
One of the things that make people lose trust in a market is having it filled with poor quality items and scams. And unfortunately, this is what the ICO world was slowly turning into. There are tens of new coins launched every day and most of these are complete crap. Most of these are nothing but scams.
And they would indeed have a horrible effect, in the long run, over the cryptocurrency world.
And it’s the long run we should be looking at. And the future still looks good. At least in my books, even though now I am $1,000 poorer than I was two weeks ago (and this is a lot of money for me, unfortunately), faith has not gone completely.
Yes, I have lost some faith and I am having doubts as it seems that everybody wants out right now. But then again, I realize that’s not true. Everybody is being FORCED out.
But they will find ways in if they really want to. That’s what happens when you have a truly decentralized network. And this WILL happen because they delayed hitting the cryptocurrency world and they’re now too late.
This has gotten too big to be destroyed. And fortunately for us, it’s still not big enough – so there’s room to grow. And it will grow, I am sure of this. I will get my $1,000 back and make a ton of profits.
I won’t become a millionaire – although I wouldn’t mind that if it were to happen – and maybe I won’t see my investment going up 40 fold to something similar, but there will be profits and those who are patient, will have a lot to earn.
Just take this as a learning experience. Just destroy the crappy ICOs already and stick to the products that are indeed changing the world. There’s a lot of them already – and I am sure there are still many that can be created in the future to help us even more.
If you were to ask me – this would be a perfect time to start spending some money on the major coins out there. Now, while the prices are extremely low. But don’t just take my advice – consider all the pros and cons, consider all the risks and decide. All I can say is that I am said I didn’t wait a bit longer. I’d get rich way faster if I’d buy now $2,500 worth of cryptocurrencies.
What’s your take on this, though? Is Bitcoin about to be destroyed? Is it or was it nothing but a bubble?