I think we can all agree we are somewhere in the midst of a sizable correction in the market. It may be reaching its end or it may still have some time to go, but at this point everyone is pretty much locked in. If you sold already, you are probably just waiting for a positive sign to get back in, and if you ended up holding, you have no choice now but to keep holding. So there isn’t much trading to be done for most investors right now, which means it’s a good time to reflect on what happened, and if you missed this crash coming, figure out why you missed the signs.
And just one note, this was one of the slowest and most telegraphed corrections I have seen in a long time. The signs and constant bad news were so obvious and the market took almost a month to really drop, which means if you missed this one, you must have been ignoring some obvious signs. But don’t feel bad, this is a good time to learn what you may have missed and correct it for next time.
So let’s look at a few lessons this correction has taught us.
Fud is real – It doesn’t mean fake news – This is one of my biggest pet peeves about crypto, and that’s the tendency for people to call any negative news fud. Not only that, there is a tendency to mix fud with “fake news”. As if any negative news is just meant to damage crypto and the markets. If you think like this, you really have to change that. There are negative things that happen in the market, and you can’t just ignore it.
I know everyone loves crypto, but there are a lot of negative things out there going on. They do effect the market. You can’t ignore them or you risk losing a lot of money.
Blindly buying the dip is foolish – So many people were saying to buy the dip. They would even post memes of warren buffet saying to buy when there is blood in the streets. The problem was people had been conditioned over the last year to think every dip bounced back rather quickly. But that won’t last forever. So we ended up with so called “experts” telling everyone to buy the dip at $16K, then at $15K, then at $14K, and even recently when BTC was at $10K you had people still babbling about buying the dip when obviously that was a terrible idea.
So the key point here is don’t just blindly buy on a dip. Buy when there are positive signs of a market turn around. Even if you have to wait until things are obviously positive, it’s better than buying a dip and then losing another 50%. Always wait for a positive sign, you don’t need to catch the bottom exactly. Wait for it to come back and show positive signs.
Listening to so-called YouTube crypto experts – One of the huge negative news stories going into this correction was the Tether situation. This was months in the making, I wrote about it months ago as did others, but YouTube personalities were almost silent on it. And if they did talk about it, it was very wishy-washy as if it’s not a big deal. The reason they did this is because most YouTube crypto guys are making more from their YouTube channel than their investing. Because of this, they don’t want to anger their subscribers, and we know how tribal crypto can be. If you say something critical of a coin, you can be attacked. So YouTube personalities make sure to never say anything too critical of the market unless a majority of their subscribers already agree.
This is why suddenly in the last week we have finally seen YouTubers talk about the Tether situation in a critical way. Months ago, everyone was calling it fud, so they simply went along with their audience. Now that the forums are filled with people calling Tether a scam, they have jumped on board.
Bottom line, if someone is making more money from their YouTube channel than their investing, you can’t trust their advice. They are playing to their audience and not telling you the truth. Not only that, they are almost all taking payments to shill various coins, so they will almost never tell you anything negative or they risk projects not contacting them anymore to pay them to promote their coin.
Blaming others for selling – As soon as you catch yourself blaming other investors for what the market is doing, you are simply hoping and wishing instead of investing intelligently. Your job as an investor is not to get mad when other people make bad decisions, your job is to predict those decisions and make a bet that will profit from it. If you think people are going to sell their coins, then you need to sell as well. Don’t hold the coin and then get mad when everyone else sells. Don’t blame them for being “weak hands” or whatever you call them. It’s your fault.
This may sound like tough talk and may be hard for some hear, but it is very important. To be a good investor you have to not care what people do, you just have to know they are going to do it. I don’t care if everyone wants to sell Ethereum and buy Pot Coin as long as I know it’s happening. Is is stupid to sell Ethereum for Pot Coin? Yes it is, but I don’t care. If that’s what investors are going to do, I am going to profit from it.
Finally, I know things may seem negative now but I am still bullish on crypto long term. I still feel BTC will hit new ATH this year. But make sure you are always learning, and you are always honest about your mistakes. Doing so may be hard, but in the long run you will start to pull away from the average investor, and you won’t be the one holding the bag.