What You Should Do if You Bought Bitcoin at the Top
So you bought Bitcoin at the top price. You may be panicking. We get it. Here's what experts say you should do...
Ah, Bitcoin. You are a great investment for some, but definitely remain one of the most dangerous investments you can make on a whole. For some people, the danger was well worth it and led to them being real Bitcoin millionaires.
For others, specially those who bought Bitcoin at the top price of $20,000 in December, Lady Luck definitely wasn't on their side. Right now, people who bought it up at peak price are reeling, since the current cost of Bitcoin is now around $8,000. It's not looking rosy, to say the least.
So, what do you do if you bought it at peak price? We decided to help others figure it out by looking at some of the options that experts have suggested...
First, let's talk pretty bluntly about Bitcoin's price right now.
I hate to say this, and I really hate to say this, but if you bought Bitcoin at the top, it's exceedingly likely that you will have to incur a loss. Period. Full stop. (Sorry!)
A lot of people believe that Bitcoin's $20,000 price tag was peak price for the foreseeable future, primarily because that's when cryptocurrency trading reached a fever pitch.
It's seen as the equivalent of a stock market crash, and Barclays strategists believe that could end up being the peak price Bitcoin will ever reach. There is some good news in this, though. How much you will lose, though, might be able to be mitigated.
The ideal situation would have been if you bought Bitcoin at the top and used stop losses to sell off goods when prices fell.
This would have allowed you to sell off your Bitcoin at as high as $18,000 or so, depending on when you would have put the stop loss order. Though that would still not have been a profit, it absolutely would have been a much better ending than, say, ending up with a $20,000 coin that's now worth less than half of what it once was.
If you didn't do that, you might want to ladder your sell-offs.
Let's say that you didn't have a stop loss order, and now your digital currencies are worth half of what they once were. Such is life. Just because you bought Bitcoin at the top, though, doesn't mean that you shouldn't try to strategize in a way that helps you get some of it back.
Laddering is a good way to do this. With laddering, you sell your coins in increments. This works well since markets tend to heal over time, and also allows you to profit (modestly) if prices rise to a similar scale again.
Buying and selling crypto should never be done in drastic measures—unless you like drastically bad decisions. This is one of the best cryptocurrency trading strategies out there because it mitigates a lot of the cons of investing in cryptocurrencies.
You might also want to HODL for dear life.
If you don't know whether you should HODL or sell in this case, you're not alone. A lot of people who bought Bitcoin at the top don't know what to do with their investments. Some, knowing that markets will typically go back up eventually, are choosing to hold onto their investments in hopes that they can recover—or even exceed—their initial investment.
Though it's unlikely to happen, you never know. This could actually be one of the better moves, especially if you're optimistic.
Generally speaking, the worst thing you could have done was sell off everything you had when Bitcoin hit its lowest price in January.
Panic-selling is one of the worst things you can do, because it's almost a guaranteed way to lose as much money as you possibly could. Sadly, a lot of people who bought Bitcoin at the top of its value did this—and learned that lesson the hard way.
Chances are that you are having a serious amount of Bitcoin regret if you sold it off after the crash. That's why laddering is a better option if you feel like you want to exit the cryptocurrency scene.
Consider exchanging your Bitcoin for a more promising cryptocurrency.
Bitcoin may have seen its peak, but that doesn't mean all the other cryptos have. If you really have lost total faith in Bitcoin, we can see why. It's hard to be one of the people who bought Bitcoin at the top, only to see the value plummet that hard.
If you're done investing in Bitcoin, you might want to transfer over whatever remaining value you have into a newer coin like Ethereum, Bitcoin Cash, Ripple, or Dash. These are likely to grow rapidly and that would allow you to recover your loss.
You may also want to consider moving your assets to more solid, tried-and-true investments.
Crypto burnout is real, especially if you had fallen victim to a Bitcoin wallet scam or if you bought Bitcoin at the top price. If you are 100 percent sure you're done with crypto and have absolutely no interest in trying to remain in the scene, then you may as well try to recover your assets by investing in a more traditional route in the long term.
It'd be wise to invest in something along the lines of an index fund, a mutual fund, or even just ETFs.
Take time to wait for prices to recover, then sell everything off.
Let's say that you take Warren Buffet's advice and believe Bitcoin to be "rat poison" after you bought Bitcoin at the top. Let's say that you see it as a Ponzi scheme that's really not going to get much better.
Okay, some people do feel that way—and it's not like we've ever had anything like Bitcoin before, so who knows? You might be right. If you feel like the crypto fever will continue for a while, then you may want to wait until the stocks recover slightly, then sell off everything in one swoop.
Talk to others on the net about the situation.
No matter what investment route you choose to take after this calamity, it'll feel good to talk to others in the same boat. You are absolutely, positively, definitely not alone. Thousands of others lost thousands, possibly even millions of dollars in crypto when Bitcoin crashed.
For your own health's sake, talk about it. It's okay to admit it hurts.
Finally, take it as a life lesson.
You live, you learn. You bought Bitcoin at the top, and it crashed. If you were part of the frenzied group that bought up everything in sight, you probably learned a great investment lesson. At the very least, you can take it as a rather pricey learning experience.