If you’ve been paying attention to what’s happening in the cryptocurrency world, you know it has given new meaning to the word “volatility. It seems like every day the market is either up dramatically or down dramatically.
Lately we have seen more falling than rising prices given the tremendous increase we saw in bitcoin and other currencies in 2017.
So what is going on?
Recently I had the opportunity to talk with Peter Vessenes, a co-founder of the Bitcoin Foundation and current president of New Alchemy. Vessenes has been in this space since 2010, so he is one of the veterans who has seen a lot of extreme volatility in the rise of bitcoin and other cryptocurrencies.
In our interview, Vessenes said he believes we are at a point of inflection. I don’t have a good crystal ball, so I can’t make strong projections. However, I would have to agree with him that we are at a point where what happened in 2017 — with the tremendous surge in prices — has tapered off, at least for now.
At the time of my writing this last week, we were seeing another “overly red” day on CoinMarketCap.com (a popular place to see current prices for cryptocurrencies). Many coins were in the loss position versus the select few that were in the positive, “green” area. It can be disconcerting for those who have purchased some coins to see losses. This is the flip side of the euphoria many experienced last year with the regular rise in several currencies.
Hold on for dear life
I’m no financial adviser, and the following is not financial advice, but it is best to only invest money that you can afford to lose. Remaining calm makes a lot of sense. Many are embracing a term called HODL: hold on for dear life.
One other area to avoid is being considered “religious” in the field of cryptocurrencies. As with many social systems, there has been a lot of emotion in the cryptocurrencies area, particularly with bitcoin. It is not recommended to be emotional when making decisions in finances. Remaining calm, doing sufficient research and getting advice from competent experts makes a lot more sense than rushing wildly from one idea to another.