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The Most Important Thing You Need To Do In Crypto!
The cryptocurrency market is a wild place, and unlike any other market out there. The volatility of this market is unmatched. If you pay extremely close attention to the market, it can be quite an emotional rollercoaster. One day prices are in the green and you are feeling like you're at the top of the world. And then the next day the bottom of the price falls out and you begin wondering why you even began investing in this risky market. All this is evident with the events that have been happening the last few days.
An extreme amount of FUD has been spread throughout the market. If you don't know, FUD stands for Fear, Uncertainty, and Doubt.
Elon Musk has been the perpetrator this time around. By just posting a few tweets on Twitter, stating that he was worried about the amount of energy that Bitcoin uses, and that Tesla would stop accepting bitcoin as payments until the situation has found a solution. Just a few tweets from him sent the market into the frenzy. With bitcoin dropping at least 15%, and other coins dropping even further. This also led people to be quite concerned about the cryptocurrency market in general. If one person has the power to "control" the market in such an extreme market, is that a market that you can, or should trust?
I will be the first to admit that I am a big Elon Musk fan, and believe he is doing some really awesome things that will make the world a better place. But, I would never take every word that he says as gospel. Unfortunately there are far too many people that take what he says, or perhaps what other people say and instantly believe it without forming their own opinion. This is evident by whenever Elon tweets about Dogecoin. Nearly every time he does this; the coin often instantly goes up by at least 10%, if not more. And the opposite is true when he posts negative things about bitcoin or cryptocurrency; as has happened this week. Instantly going down 10% or more as well.
This leads me to something that I always talk about, but as the market increases in size; the importance of this thought is even more important. I would go so far as to say this is the most important thing that you need to do not only with cryptocurrency, but with all investing in general. This important thing is; doing your own research.
Entering the cryptocurrency market, and HODLing for a lengthy time, during extreme amounts of FUD, through price drops and price spikes; this can be one of the most difficult things that you will ever do mentally. It will challenge you, and test you in ways you never imagined before. You work so hard to earn the extra money that you have to invest; why wouldn't you put in at least the same amount of effort to research the thing that you're considering investing into?
Doing your own research. Forming your own opinion about the project. You need to know as much possible about the project. Don't take the words of others and let their thoughts influence your own. Be wary of celebrities and influencers you most likely have ulterior motives. YouTubers, or blog writers as well. It is okay to watch and learn from them, but you always need to know that what they say may not be true, or may be spun in a way that benefits that said person.
Here is what I do. I take in all the information that I possibly can. Watching YouTube, listening to podcasts, following Crypto Twitter, reading news websites, going to project websites, learning about the teams involved and their goals, learning everything to do with the coin, thinking about how this fits in with my investing plan and goals and the list goes on. The key thing is that if I do take in information from other sources, I always, always do my own research before making any decision.
While I have a lot of respect for Elon Musk, or other people with an extreme amount of influence power. I wouldn't invest base on a tweet that they might post. I have done the research and feel strong conviction in the decision that I have made. What they say has no influence over me. And this conviction gives me great peace during times that others may feel quite scared.
Unfortunately, a lot of people don't have the same conviction and when they see these influencers spreading FUD. This makes them feel quite scared and then sell in mass. This is what causes the price to drop. There is a famous thought that often circulates during these times of panic. That during these times, bitcoin is being transferred from the weak hands to the strong hands that will not sell it back. All I can say is thank you to the people that let me buy more bitcoin at an extreme discount!
How about you? Did this recent FUD make you concerned and cause you to sell? And, how do you go about doing your own research for crypto investments?