Dec 08•4 min read
Don't Fear The Volatility
Happy Friday to everyone out there. Hope you had a productive week and are ready to unwind for the weekend or maybe get some last-minute Christmas shopping outta the way. I know the struggle all too well =)
Back to Bitcoin now. Do you know what is stopping you from purchasing the most secure and soundest form of money known to man? The number one concern that I have heard from people unfamiliar with Bitcoin is volatility.
They don't like the fact that it can be up 20 percent one day and down 40 percent the next. Which in all honesty is completely understandable. It can be worrying to see your hard-earned money lose value quickly. With the dollar depreciating at a rapid pace, it is wise to want to be prudent with your cash and want to invest it wisely to grow your wealth or at least beat inflation. Isn't it sad we have to do this to overcome what the Federal Reserve and the Federal government are doing to us?
I understand the concern but if you take a step back for a second you will start to develop a new appreciation of volatility.
Volatility Is Natural
Do you invest in a 401k at work or have any type of investment account? If so the securities that you own are subject to the volatility of the stock market. We want volatility in the markets, this is how you grow your wealth over a long period of time. Without volatility in the stock market, stock prices would stay pretty flat and you wouldn't grow your wealth.
We both know that volatility is a double-edged sword. There is always a risk of your stocks losing 100 percent of their value, but it is a risk that we live with.
Bitcoin is the same way. The Bitcoin price is simply a reflection of the market of people buying and selling Bitcoin globally, 24 hours a day, 7 days a week. You don't have to wait for the market to open with Bitcoin, unlike the stock market where you can only trade during certain hours.
Look A Volatility Through A Different Lens
Instead of looking at Bitcoin volatility as bad, think of price dips as a way to buy Bitcoin at a lower price. We do this when we go shopping, why not for Bitcoin? I don't know anyone who likes to buy things for the full price.
I don't know about you but I love discounts and refuse to pay full price for an item if I don't have to. Bitcoin is the same way. I see a price dip, it makes me want to buy more because I know it will be worth more in the future. Buy and HOLD is all you have to do to gain from Bitcoin.
Bitcoin Ownership Drives Volatility
Did you know that Bitcoin was only created in 2009? The overall user base for Bitcoin is very small when you compare it to the stock market. There are roughly 106 million people worldwide who own Bitcoin. The world's population is 7.9 billion people. That is how much room Bitcoin has to grow.
So if you own Bitcoin you are rare among the world's population. So if there are only 106 million Bitcoin wallets in the world, naturally there is going to be some volatility in the price because of the overall size of the network. As more people adopt Bitcoin, the large price swings will diminish. The time to get in is now if you want to acquire more of the Bitcoin pie before others do. Remember... Buy the dip!!!
By Robert Hall aka @Nullifyfedlaws
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