If you are a Bitcoin investor and a believer in the technology, you will most likely agree that the massive drop in Bitcoin prices is necessary for its long term potential and higher recovery. After experiencing that 70% drop from December prices, and crawling through almost 4 months of bearish cryptomarket, here are 3 reasons why I believe the dip was good.
1. Gamblers need to EXIT the market
Some players in the cryptomarket were only lured in because of the promise of easy money. During the 2017 fourth quarter insane bullish run, many gamblers got into the frenzy and threw in money that substantially affected the market’s fluctuation and instability. Because of this massive dip, many gamblers will have already realized by now that the cryptomarket is not just about the money, but is more about the technology and innovation. Gamblers who only cared about the money will eventually exit the market, which will leave behind more serious investors.
2. The dip teaches an important lesson on risk management
If you entered the cryptomarket during the FOMO season, chances are, you are sitting at a huge loss right now. Most players who got in because of FOMO never really considered the risks in the cryptomarket. Of course, all investments have risks. But the cryptomarket, being an immature market still at the moment, has considerably higher risks due to its instability. The recent major market correction is evidence of the huge risks in the cryptomarket. This dip taught an important lesson on risk management, especially to those who were new to the market.
3. Seasons of fear and bearish sentiments are great buying opportunities for value investors
If you are a serious investor who is putting money on Bitcoin because you believe in its value and technology, then this bearish market is a perfect buying opportunity for you. Fear creates great entry points for value investors. Like any other market behaviors, the cryptomarket has seasons of highs and seasons of lows. Currently, we are at a low season, which opens up buying opportunities for serious investors. If you believe that the technology is here to stay, then there may be low points, but there is no other way for Bitcoin but up. On a technological standpoint, there is pretty high probability that things would only go better from here.