Cryptocurrency Prices are Falling. Should I be Worried?
Should I Buy, Hold or Sell?
The cryptocurrency price correction, which started a couple of weeks ago, is still going on. Prices of popular cryptocurrencies like Bitcoin, ETH and DOGE as well as that of many altcoins have fallen 50% or more in the last two weeks. Experts are even comparing this to the bitcoin crash of 2017. So, it’s natural for investors to get worried and start thinking about selling their crypto holdings.
If you as a bitcoin investor are concerned about the next best move amid the ongoing volatility, you are at the right place. If you are investing in Bitcoin, you probably already know that it is a highly volatile cryptocurrency. That said, it is the basic nature of Bitcoin to rise and fall unprecedentedly and sometimes without a reason. What I am trying to say is that there is no reason to panic. So, if you are planning to panic-sell your cryptocurrencies, don’t.
Before you can consider an action inspired by the recent crypto movements, it is important to know what is causing this sudden whirl in crypto prices. What you must know is that almost all cryptocurrencies, including Bitcoin, were going up until they started falling suddenly on and after May 19th. So, what exactly happened on May 19th.
Well, one of the biggest news stories was from China, where the mainland government announced a ban on all financial transactions, including payments, involving cryptocurrencies. The government instructed all financial institutions based in the country to stop providing crypto services. And given that China is one of the biggest economies in the world, the news obviously had to have an impact on the market. So, investors got afraid and started selling their assets, which led to a sudden but not very significant crash in the prices of almost all top cryptocurrencies.
The market crash, which started 19 May, is still going on, and the prices of major cryptocurrencies, including Bitcoin, ETH, BNB and others have dropped by 50% or more in the period of two weeks.
The recent crypto market crash was also reportedly fueled by comments from Elon Musk, founder of Tesla and SpaceX, who said his company is planning to stop sales of Tesla using the cryptocurrency due to environmental concerns. According to him, the use of fossil fuels in bitcoin mining has increased drastically over the past year.
However, he also said that cryptocurrency is a good idea with a promising future, and his company intends to use it for transactions in the coming future and also looking for “cryptocurrencies that use <1% of Bitcoin’s energy/transaction.”
Why you shouldn’t be worried
As a crypto investor or believer, you know the recent market crash is nothing to be worried about. In fact, it is the basic nature of bitcoin’s price to rise and drop suddenly and significantly. We have seen it many times. Only recently, the price of Bitcoin rose from ~$29,000 in December 2020 to ~$64,000 in April 2021, which is an over 100% boost in just three months.
So, no, you should not be worried. In fact, use this opportunity to buy more coins at low prices.
If you are looking for alternatives to Bitcoin volatility, I would recommend the Libra project. Libra Coin is the native digital currency of the Libra Ecosystem, whose primary role is to act as a secure & low-cost currency for e-commerce payments. The Libra Ecosystem is a blockchain project designed to help e-commerce operators, dealers and consumers to overcome the various challenges that the industry faces, including that of low-cost and fast payments. You can read more about the project in the Libra whitepaper: https://libraecosystem.com/assets/site/images/whitepaper.pdf