Lessons learnt from Bitcoin crash in 2018. Live price: 3913 USD.
It is undeniably that everyone was so crazy on Bitcoin, even myself, during the monster rally in 2017.
Everyone wanted to hold a small portion of bitcoin. (I hold small quantity of bitcoin and other few altcoins myself).
We had Bitcoins in our radar. Due to the volatile nature of the Bitcoin, which could drown value of Purchase, we refrained ourself from giving recommendations.
Bitcoin as investment:
Bitcoin is a digital currency; too much unregulated. But the Blockchain technology could do a revolution in years to come. Bitcoin on its own doesn’t create value like stock market. Still, you can buy Bitcoins at a price and sell for profits.
Looking for profits from such a market instrument using its momentum is called Speculation. When speculation happens, any product would skyrocket and create a bubble. Bubble captures the most greedy at its peak.
Writing off Bitcoin, it’s too early:
Should you sell or buy Bitcoin at current price. Since we have said investment in bitcoin is a speculation, we should always take help of technical charts to predict the price movement.
I would not add a recommendation to add or sell Bitcoin coin here. But I feel the Bitcoin would pullback atleast 30% of its recent losses and take a direction from there and it’s too early to write-off Bitcoin as an investment. We would add any recommendation on Bitcoin or other altcoins in our website dedicated for Bitcoins, www.silkbitcoin.com.
How should we apply the facts that occurs to bitcoin to the Indian Stock Market?
You can almost compare bitcoin crash to that of the crack in the Indian Broader Market.
1. Invest in quality stocks.
2. If you purchase a stock for short term gains without understanding its business, it’s speculation. Strictly use technical charts and best technical analysis method to determine the SL atleast.
3. Stocks can create wealth in long term if you really understand what moves a stock price.
4. It is always advised not to buy stock that are falling and not to sell while the stock rallies. Never settle for 10% or 20% returns until you know the hidden value in the stock.
5. Every stock pick is not a winner. choosing the right stock can be done. We should not expect every stock to be winner. We need to exit some stocks in losses and continue holding stocks in profits based on fundamental and technical facts. Averaging a falling stock just for the reason that it has fallen should not be done
6. It’s always better to invest than to speculate. Time should not be wasted in speculating until it’s really worth wasting. If you could work, accumulate and invest in stock, why do you really want to speculate and waste your time. Use your time wisely.
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