Bitcoin bear market: we’ve been there before
Some new bitcoin investors may be upset by what has happened lately, especially if they were expecting very long highs for BTC or no big drops. It seems to have become apparent in recent weeks that this is a bear market.
From peak to trough, we have seen a 75% drop. From $69k we are down to about $17k. We have observed a kind of “crypto contagion,” with the explosion of the Terra Ponzi scheme (UST) with the liquidation of other companies such as Three Arrows Capital.
What is the positive about Bitcoin decline
First, many people are mentally anchored to the 2017 top around $20000, as if that was the price for the whole of 2017, however, the reality is that bitcoin spent about 75% of 2017 below $5k and about 90% of 2017 below $10k.
Long story short, if you were accumulating for the long term, you are still in the black. You would have been accumulating all along and in the periods when the BTC price was lower you accumulated more BTC for your euros.
The macro-environment is difficult. Investors around the world are struggling to find a place to store their fortunes. Equity and bond portfolios are experiencing one of the worst times on record, and inflation is rising around the world. This is precisely the time when traditional investors will be willing to reconsider their allocations.
Bitcoin has already gone through its cycle of sudden loss in value. With all this turmoil in the bond markets, it is entirely reasonable for bond investors to decide they prefer to buy crypto, an asset that cannot be easily manipulated by governments and central banks around the world.
There is another positive aspect: people have another chance to accumulate cheaply. Those who say that “early Bitcoin holders got lucky buying cheaply” have less of a foundation to stand on. Bitcoin right now is relatively cheap and is an excellent opportunity to get into crypto.
Perhaps in a few years, we will look back and say how “lucky” we were to stack coins at $20k. Volatility is the price you pay for Bitcoin’s incredible qualities and increased purchasing power in the long run.
If you want to build a business or get a job in Bitcoin, now is a great time. You could take this opportunity to connect with people, help local merchants accept crypto, and put your skills into practice. Bear markets are often the time to find out who is really committed to the cause, and this can help you find the right kind of people to work with or learn from. Bear markets are also a time when experienced Bitcoin holders can help new Bitcoin holders who are going through their first bear market.
When the cycle reverses and the up market returns, you are in a better position having already built your skills, your meeting group, your venture, your business, or your project. You may have already created a small but loyal user base for your Bitcoin project, who could help you contribute to the project or spread it among their friends. If you have done a good enough job in implementing your product or service, Bitcoin holders will recommend it to their families and friends, and you can seize the next opportunity in the next upward cycle.