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On May 19, 2021, the price of Bitcoin crashed violently. In a matter of hours, the Bitcoin price dropped from $43K to just $30K. Tens of billions of dollars were liquidated in a few hours before a still powerful rebound brought the price of Bitcoin back to around $40K.
The bottom seems to have been reached around $30K.
The strong rebound tends to confirm this. Holding the $30K mark was essential to stay in a Bull Market pattern. As I write this, the price of Bitcoin is approaching $42K.
This major pullback is here to teach newcomers the difference between theory and practice in being a Bitcoin HODLer
Yesterday was the first major pullback for many of the new entrants into the Bitcoin world. Not everyone who entered the world during the bull market rally that began in October 2020 had experienced this. To them, the world of Bitcoin looked easy.
You buy Bitcoin and its price only goes up.
Obviously, the reality of a Bitcoin HODLer's daily life is totally different. This difference is the one generally observed between theory and practice:
Being a Bitcoin HODLer no matter what requires much more than patiently counting your profits in U.S. dollars. People who didn't panic on May 19, 2021, and took the opportunity to accumulate more BTC have fundamental confidence in Bitcoin.
If you have a long-term view of Bitcoin, you can only buy more BTC when you see its price plummet like that in a matter of hours.
When everyone is panicking, that's when the best opportunities appear
Baron Rothschild was an 18th-century nobleman and member of the Rothschild banking family. During his career, he made a tremendous amount of money by buying in FOMO (Fear Of Missing Out) mode when everyone else was panicking. He is credited with saying that:
“Buy when there's blood in the streets, even if the blood is your own.”
It's when everyone else is panicking that you need to get greedy in the investment world. And that's even if your own blood is running in the streets, to use his colorful expression.
So even if you were in a latent loss yesterday when the price of Bitcoin was touching $30K, you should see this as a great opportunity to accumulate more. To do this, of course, you must fundamentally believe in the Bitcoin revolution. If you don't, you can't take full advantage of Bitcoin.
If you bought Bitcoin at $50K for the right reasons, you can't help but want to accumulate more at $30K
Those who bought Bitcoin when its price was rising throughout the early part of 2021, and then stopped buying or even selling yesterday, are completely illogical in their decisions.
When you buy an asset like Bitcoin above $50K, it is because you believe that the current price is far below the future value of that asset. You are investing because you believe that the growth potential is significant for the coming months and years.
So, if the price of the asset falls, you should want to buy more of it. This is especially true if the fundamentals surrounding the asset have not changed between the $50K price and the price around $30K.
Doing so requires stepping back to see the bigger picture. I realize that this is a lot to ask if you are new to the Bitcoin world. Nevertheless, it is your job to constantly deepen your knowledge to be able to do this. Your job is to reduce your ignorance throughout your life to make the best possible decisions as often as possible.
Once you've taken care to get rid of the ambient noise, i.e. Elon Musk's tweets, FUD from China about a ban, or rumors of a money-laundering investigation into BINANCE in the United States, you can focus on the main thing.
The bottom line is the Bitcoin revolution. This is the real signal that you need to watch constantly.
The Bitcoin revolution progresses block by block
Over the past few months, the fundamentals of Bitcoin have continued to strengthen. The infrastructure continues to build around Bitcoin. Taproot is in the process of being activated by the majority of miners in the Bitcoin network. This will be finally sealed in early June 2021.
Taproot is a proposed upgrade to the Bitcoin protocol combining the Schnorr signature algorithm with MAST (Merklized Abstract Syntax Trees) and a new scripting language called Tapscript. Taproot will increase the flexibility of Bitcoin's smart contracts while providing more privacy, as complex transactions cannot be distinguished from regular transactions.
Finally, Taproot will improve the scalability of the protocol, preventing all contractual conditions from being processed by the network and cluttering the Bitcoin blockchain.
The Bitcoin protocol continues to evolve in the right direction. This is what you should be interested in rather than FUD rumors whose sources are purposely never cited. The Lightning Network is slowly but surely growing around the world.
In short, everything that made you want to buy Bitcoin above $50K is still there when its price drops to $30K in a few hours. Rather than being impatient, wanting to get rich right away, you would do well to understand that Bitcoin is all about power.
Buy Bitcoin to take the power, not to make money
Bitcoin is about giving you power over your money. Bitcoin allows you to live your life on your own terms.
The day you truly understand this, you'll stop constantly looking at Bitcoin's price charts and relax and enjoy this incredible monetary revolution you're lucky enough to be a part of. It's up to you to change your money's future for the better.
To do this, two words are essential: trust and patience. Trust in the Bitcoin revolution, and patience to let this revolution progress.
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