If you’ve been following this series and have nerves of steel, you’ve done pretty well for yourself by now. In my prior article, Bitcoin Buying and Selling Guide, I introduced you to dollar cost averaging as a strategy to buy on the dips…. and boy has there been dips!
As expected with a relatively new technology like Bitcoin, volatility is going to be a way of life until this cryptocurrency gets a solid footing. There were two “events” that took place since I started this series that rocked the Bitcoin community to its core and the price of Bitcoin took a major hit as a result in each case.
However, with volatility comes opportunity as long as you believe those events won’t eliminate this technology altogether. I have to admit, this last piece of news challenged my own convictions but I’m a seasoned market man and know how to keep my emotions in check when it comes to investments.
The news I’m referring to is when the Chinese exchanges reported that their banking providers had received notice that the People’s Bank of China (PBOC) would tightly enforce guidance meant to better separate the country’s state-backed financial system from the bitcoin industry.
That news sent Bitcoin prices plummeting to the low $300 range. Prior news was Mt. Gox, one of the largest Bitcoin Exchanges, filing bankruptcy. Both events sent Bitcoin prices in a tailspin. However, in both cases, Bitcoin showed just how resilient it can be by recovering to prior levels. As of this article, the price is just over $500 again.
So, given how certain events can influence the price of Bitcoin, it stands to reason that you would want access to as much information as possible. Knowledge is power and I will provide you two sources I use to keep up on the events happening with regards to Bitcoin prices and evolution.
CoinDesk is arguably the most credible source of information I have personally found on the net. Their information is timely, balanced, and accurate.
CoinMarketCap is another resource I follow that gives me an idea just how well alternative cryptocurrencies are doing. It’s important to keep an eye on that because Bitcoin does have flaws and one of the theories out there is it being dethroned by another coin that is better. As you can see, no other coin is within striking distance of doing that but it’s important to watch just in case.
As you can see in the upper left-hand corner of the CoinMarketCap page, there are 233 cryptocurrencies out there and I’ve watched that number increase over the months. That doesn’t mean you should join them because most of these are worthless and won’t survive. (Update: 9/10/2020 There are now 7,025 cryptocurrencies as of this update date.
Please use these resources to educate yourself and make informed financial decisions. It is quite possible that this technology will not survive over the next few months and years but given what it has already been through, it seems to have a solid backing keeping it alive.
If you believe in the Bitcoin concept, staying informed is the best way to keep yourself out of harms way. Investing without knowledge is gambling and there are plenty casinos out there for that purpose.
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Disclaimer: The content provided on this website is solely for informational purposes and should not be interpreted as an offer to buy or sell. I am merely sharing strategies I have used in the past, that were not developed by me but taught by others, when it comes to investing. As with any investment, you should consult a licensed financial advisor prior to implementing any investment strategy. I am not a investment advisor, broker, or dealer and not liable for errors, omissions, or losses as a result of the use of this content.
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Brad Webb
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