Crash of bitcoin (BTC) and other cryptocurrencies: What to do if you have them?

This is a question that many have probably been asking for a few weeks… All those who have invested in cryptocurrencies have lost substantial sums. That’s a fact. Now… what to do? Some would say to wait. This is my position. It is most likely best to wait. As for a traditional market, as for the Stock Exchange, it is almost certain that prices will go up. It’s a patience game. Whatever one thinks of bitcoin (BTC), or cryptocurrencies in general, it is certain that they have intrinsic qualities. We can cite the decentralized nature of cryptocurrencies which can allow us to escape traditional fiat currencies.

The causes of the cryptocurrency crash

The latest crypto crash can be attributed to a multitude of factors. The increase in inflation fears, the fear of drastic regulation on cryptos in several countries, the impressive fall of the Nasdaq (cryptocurrencies are very correlated to it), the infamous crash of TerraUSD (UST) and Terra ( LUNA), the probable bankruptcy of Celsius, etc. All of these factors are immediate catalysts for such a sharp drop in prices. As a result, the market capitalization of the cryptocurrency industry currently sits at $977 billion, about a third of its all-time high. Individual investors around the world have suffered significant losses… Indeed, most cryptocurrencies are trading 70% below their all-time high.

Your losses in bitcoins (BTC)

On January 1, 2022, bitcoin was trading at $47,733 and is now trading at $21,062. So, with a negative rate of return of 57.33%, $1,000 invested at the beginning of the year would be worth $426.70. Or 404.52 euros.

Your losses in ethers (ETH)

On January 1, 2022, Ether was trading at $3,313 and it is now trading at $1,098. So, with a negative rate of return of 69.54%, $1,000 invested at the beginning of the year would currently be worth $304.60. Or 288.77 euros.

And in Dogecoins (DOGE)

On January 1, 2022, Dogecoin was trading at $0.15 and is currently trading at $0.057. With a negative rate of return of 65.80%, $1,000 invested at the start of the year would be worth $342. Or 324.23 euros.

Faced with the collapse of cryptocurrencies and bitcoin (BTC), what to do?

Sell ​​what you have and try to minimize the damage? Or hang on and hope things get better? This choice depends on several factors… such as the amount you have invested, the time horizon of your investment and your own resilience to risk. As a general rule, one should never invest only venture capital. That is, money you can afford to lose. If you’ve taken this approach with BTC and its rise or fall is unlikely to cause you material hardship, it’s best to hold onto your investment.

Crash of cryptos: do not panic and potentially continue to invest in bitcoin (BTC)

The major risk is giving in to panic. The first thing to do when you realize that prices are in free fall is not to panic. There is nothing worse than reacting to your emotions. Succumbing to panic is likely to cause you to sell your cryptocurrencies at the least favorable time. This is called a panic selling in English. Another disastrous consequence would be to make movements between different wallets in haste and without any precautions. Another option, which can involve many risks, can also prove to be very advantageous. Indeed, while the price of BTC is currently at 21,062 euros, it can be very interesting to buy and resell when the price goes up by several thousand euros. Some refer to the crash as a boon. It’s sales ! Time to fill up. It all depends on the vision you have of your investment and what you are potentially ready to put into play (and therefore to lose).

In conclusion, my advice would be to not give in to panic. Cryptocurrencies are crashing and you have lost a lot of money. Do not panic. Cryptocurrencies have real qualities provided and are here to stay. We are only at the beginning of their use. BTC itself is an alternative that still offers many freedoms in an economic system on the verge of collapse. Admittedly, cryptocurrencies are also affected by the situation, but for the moment, the best choice is probably to wait. If you are patient, the BTC can regain its lost value and even more. For now, it’s better to wait, it’s probably the safest choice…

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Gregory Morat

Student passionate about entrepreneurship and fascinated by the technologies behind cryptos! Yes, I am convinced that the two are intimately linked: blockchain and NFTs are revolutionizing many sectors and presenting unprecedented opportunities.

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