Why I’m Not Worried About a Crypto Market Crash
Switch off the TV and do your own research
Probably you’ve heard these days about the crypto market crash and that Bitcoin has lost half of its value. Also, probably you’ve watched on TV or read in the newspaper that cryptocurrencies are doomed to fail.
Well, let me put it this way: cryptocurrencies are here to stay.
Why am I not worried at all about this drop in value? Here are some of my reasons:
I invest long term
Look at this chart below. Does it look to you like Bitcoin is going to crash any time soon? There was a similar drop in price just a year ago and from there, it went up to a new ATH (all-time high).
Although Bitcoin in theory could crash completely, it’s very unlikely because there’s a limited supply and an increasing demand. Also, it’s not controlled by a central entity, so no one can really take full control of it, only move the prices as Bitcoin whales do (individuals or entities that hold large amounts of Bitcoin).
I don’t have any Bitcoin in my portfolio, not because I don’t like it, but because I arrived late. Also, I’m more interested in cryptocurrencies with a project behind them, like Cardano.
I don’t invest for the short term, I barely look at the charts and read news only on the Internet, because TV or newspapers don’t have a clue about cryptocurrencies.
I invest in cryptocurrencies with a real project behind
Most cryptocurrencies have a company, employees, etc behind them, so buying them is like buying a share of a startup. If the company does well, the token will go up, otherwise, it will go down.
So basically I follow the same process I’d follow if I invest in a startup: I have to like the project, their team, their mission, because it will take time to get good returns on the investment, people that got rich quick with cryptocurrencies are a minority. Like any other investment, it pans out in the long term.
I don’t invest in sh*tcoins
You’ve probably heard of Dogecoin and the overnight millionaires it has created. The reality, though, is that only a minority of people got rich that quick, only the ones that were able to sell at the top.
After Dogecoin, new dog cryptocurrencies appeared, such as Shiba Inu or Dogelon Mars. The problem with these coins is that they’re very speculative as they don’t have a project behind them, or the project is a bit irrelevant.
I don’t trust governments
In 2020, there was an increase of 18% in the total supply of US dollars. That means one in five dollars was created then.
Printing more money always leads to inflation. We’ve seen it before in Weimar, Argentina or Venezuela. Inflation hits especially harder for those with lower incomes.
Central banks and governments are increasingly trying to regulate cryptocurrencies (even banning them in some countries) or speaking against them. Although these institutions should in theory protect us, they do not always have your interest in mind, that’s why you should always find ways of protecting your hard-earned money.
You should make yourself this question, would you rather save money that they can print out of thin air, or instead, put it on something that has a limited amount supply?
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