It happened again, cryptos have lost nearly all of their gains from the all-time highs of December 2017. It is good to not be “that person” who bought a Bitcoin last December for nearly $20K and has since seen their coin depreciate to roughly a fifth of its value since then. With all the financial markets down these past few weeks, everybody is concerned with the future once again. But you have been through this before; remember? 2008 spelt trouble for the stock market in ways unseen since the great depression. Will you let history repeat itself or will you learn what an opportunity really looks and feels like? Don’t be on the wrong side of history [again]!
The great recession of 2008 was catastrophic to many people’s balance sheets; sending stocks like Amazon (@$41.75), Apple (@$15.37) and Disney (@$22.84) plummeting at the notion that the American and overall global economy was doomed. Nobody who had been contributing to his or her investments was feeling optimistic for the future, as there were too many unknowns with issues such as the subprime mortgage crisis, the failure of major financial institutions and large automakers, massive layoffs and hiring freezes nation-wide. Oh, and the fact that the United States government felt it necessary to bail out some of these reckless “too big to fail” institutions with the people’s tax dollars created a tremendous amount of hostility and distrust in the showrunners for quite some time.
If you lived through that rather sulfurous time with your balance sheet intact and sold your stocks today, you would be a beneficiary right now of the tremendous turnaround the economy has seen since then. Even further, if you had run into the fiery pits and bought up Amazon (current price @$1502.06), Apple, (current price @$172.29) and Disney (current price @$112.08) when everyone was panic selling, you would be a much wealthier person today. Even if you bought a house during this crisis, you would see your home likely appreciating rather nicely since the recovery. Obviously, the message here is simple, HODL for the long term, however, cryptos were not around during a massive financial market event before and have yet to be stress-tested.
There was no playbook for those who owned stocks in 2008. Many people thought the economy was going to continue to crash further, as there was no hope in sight and no reason for people to see or believe in the growth potentials ahead. A tremendous amount of government and Federal Reserve intervention was involved to stabilize much of the market via money printing, artificially lowering the interest rates to near 0% and changing laws to prevent the problems that caused the crisis from reoccurring. Ultimately things are in a much better place. Even with the recent market slumps, all three of the stocks outlined above are doing quite well.
There is a parallel between stock investors of 2008 and HODLers of 2018, no playbook and a lot of uncertainty. Nobody has a crystal ball and will tell you cryptocurrencies are going to succeed. History can tell us that those who benefit from times like these are those who capitalize on big risks and run into the fire instead of away from it. So now that the crypto market is burning, what are you going to do; run away from the fire or walk along the melting asphalt on this long dark and unknown road less travelled?
If you’re like me, you’ll go into the fire when everyone runs away. This is like a crypto super sale that hasn’t been seen in over a year and might never be seen again! I would go to a trusted exchange like Binance or Coinbase and buy up some cryptos while they’re still on the cheap. These are simple to sign up and easy to use if you’re new to it all. While you’re at it, get yourself a free stock by signing up for Robinhood so you can follow crypto market movement (and yes, get a free stock too). If you haven’t already done so, follow the golden rule and buy a hardware wallet like Ledger, which currently has some awesome discounts. Use the hardware wallet to hold your crypto (or part of it).
There is a large and growing grassroots community of cryptocurrency users who believe in the potential of this technology and the transparent nature behind it. Just check out Reddit communities such as r/Cryptocurrencies, r/Bitcoin, or r/Ethereum to see the sentiment that is out there. These people believe in the tech and the future use cases of such tech; many of which stretch outside of the financial use cases that have drawn many into the market to begin with. Many believe in and share the cultural belief that they should hold onto their cryptos in the face of uncertainty, as a disciplined investor would also say the same. They are a new kind of investor that will continue to hold their crypto as markets suffer unnerving fluctuations that would break the most privileged of Wall Street investors. It is not about the money for them, at least in the short term.
Panic cycles come and go and there will always be unknowns and fears as markets fluctuate. There will also be a lot of opportunity for those with the nerve and willingness to step foot in the unknown and take a risk. If you are the person who bought Bitcoin last December at the all-time-high, I feel for you and wish you an easy HODL moving forward. Many believe your purchase is still wise in the grand scheme of things. Time will tell what will come of this crypto world, but one thing is certain, there will always be HODLers even if the entire market crashes to nothing and I will be one of them.
Marcus Henry is an American Journalist with over 10 years working in tech. He has been actively involved in the crypto community for the past two years and currently works out of Austin, Texas. He covers breaking news, writes perspective pieces and reflections and conducts interviews with industry professionals and community members. Follow Marcus Henry on Twitter- @MarcusHenryHODL
By Marcus Henry