If you have only recently been paying attention to major news outlets; they would have you believing that the bull market has already come to an end. That bitcoin was dying and that the value proposition of bitcoin ended up being false. That perhaps you should cut your losses and sell off now while you still can. This is exactly what they would like you to do. But you need to remember that bitcoin has already been pronounced dead dozens of times, and each time it has come back stronger. This time is no different.
Even outside of that FUD news, the bitcoin market does come with plenty lows and highs. Days of feeling that you're at the top of the world. Then then next day feeling like the scum of the earth. Unfortunately during the last week it has been more of the low feeling. Especially if you're a trader, and even more so if you trade with leverage. Many people were liquidated and lost everything.
But even if you're a normal HODLer, how can you remain calm when everyone else is panicking? Here are hopefully a few tips that could save you a lot of stress. While they are fairly basic and standard, I do think they could help you live a much more stress free bitcoin life.
1) Have a Low Time Preference
Having a low time preference means that you're not even considering selling within the near future, and because of this fact you don't need to worry about the price as much. Its perfectly fine to check the price of BTC a few times a day, but if you find yourself constantly glued to looking at the price, and worrying about price dips of less than 5%, then you could be devoting too much time to it. When I first got into bitcoin I remember that I would check the price when I first woke up and when I went to bed. But after time went by, I found myself looking more and more at the price, until it became a problem. Always remember that investing is just one part of your life, and don't let it become so much of a focus where it takes over your whole life and prevents you from doing other things. Balance is key.
2) Only Invest What You Can Afford to Lose
Many people forget just how risky of a market that cryptocurrency can be. There are coins that have lost more than 90% of their value and never recovered. At times that 90% drop has happened within an hour. There are pump and dumps, rug pulls and several scams that will try to get your money. But even if you're investing into something amazing like bitcoin; you still have to realize that you're investing into something that while I think it is amazing, also could fail as well.
Only remember that the money that you invest into bitcoin and other cryptocurrency could be lost. I have gotten to a point where once I buy bitcoin; I don't even consider it as money. I have separated the idea of money and the coin, and just think of how much of each asset that I have.
Once you have fully accepted this philosophy you will begin to worry a little bit less when the price is extra volatile.
3) Have Money on the Side
I always, always stress the importance of dollar-cost-averaging into bitcoin. Buying at regular periods of time that will allow you to get an average price point of ups and downs. But, you should also have some money set aside for the larger price dip days. A few days a year bitcoin has their largest price dip days, and if you can have extra cash on the side to take advantage of these days, it will help your portfolio extremely. Last year my portfolio was transformed, because I was able to take advantage of the corona virus price dip in March.
Once you have this money ready, your thinking will also begin to change along the way. On these red price days you will no longer be thinking of how much your portfolio is hurting that day. But, you will begin thinking that everything is on sale today, and today is an amazing chance to grow your portfolio.
4) Avoiding Leverage
Trading bitcoin is an acquired skill that could net you a lot of money, and could be the quickest way to grow your portfolio. But it is always the fastest way to lose your portfolio as well. I can't imagine having my position that I worked so hard for, and for so long, be liquidated in an instant. For that reason I never recommend using leverage. It only amplifies your risk by several times. Especially if you are new to cryptocurrency, or aren't too technical of a person.
Outside of the risk of this type of trade, I do tend to se that spot buyers tend to be much less worried about the daily price action. This also goes along with #1 one of this list as well.
5) Opportunity
While this is very similar to having money on the side, I think it is of equal importance, or probably even more. If you are a bitconer, and have full conviction in what you're investing in; when the price drops you should be viewing this as an amazing opportunity. The market has given you a chance to grow your portfolio at a great discount. This goes for all investing and not only bitcoin. Once your mind and philosophy has been adjusted to this kind of thinking, it really opens the doors for the rest of your investing life. You will see the world differently, and more as an entrepreneur.
I have said this many times, but the two moments that changed my financial destiny forever were when I began investing into bitcoin, and also when I read the book Rich Dad, Poor Dad. I'm so thankful that I did both of these things, and have reaped the rewards, but I do regret that I didn't do it sooner. Growing your financial literacy and investing mindset is one of the greatest tools you can ever learn.
6) Find the Real News
I really hate to use this phrase, but there is a lot of "fake news" out there and you need to learn how to decipher everything and learn the real purpose for why that news has been released, or the timing of it. For example, every time that bitcoin starts going up in price, an extreme amount of FUD news comes out. Perhaps new regulations from the government for bitcoin, or perhaps many flaws about the coin, or people saying that it is trash. It happens every single time. For example, just last week when bitcoin reached an all-time high of $58,000; that is when Janet Yellen began talking about bitcoin again and how bad it is.
Just always remember that they have an alternative motive for saying what they are telling you. Perhaps they are afraid of Bitcoin overthrowing the US dollar in dominance, or losing control over people. Or perhaps they just don't understand bitcoin, haven't invested into it and are waiting to protect their "old" investments.
I find that the longer that you are into bitcoin and cryptocurrency in general, the more you will see the world for how it truly is. It really helps a person to take off the blinders that have been blinding them for so long. Remember that these people want you to sell your bitcoin, and perhaps they even want to buy it from you.
What do you think!? What are the most important things that will help you to maintain a stress free life while investing into bitcoin!? And what things do you do!?
As always, thank you for reading!
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