Simply Bitcoin: This Bitcoin Mistake Could Cost You Everything

Cryptocurrencies led the markets higher last year. And that trend continues in 2024. The SEC approved 11 bitcoin ETFs for trading. That’s allowing institutions to invest in bitcoin easily. With money flowing into these funds, prices continue to trend higher.

Given the volatility in bitcoin and cryptos in general, however, it’s likely that prices won’t continue to trend straight up. There will be pullbacks. It’s how investors handle that volatility that matters.

For most traditional assets, a price decline may be a time to sell and reevaluate. Even cyclical industries will have periods where they underperform for years.

In cryptos, a bear market can mean a big pullback of 80 percent or more from the prior highs.

That’s the kind of market where traders will want to sell. However, the bull markets in cryptos make massive upside returns.

So at some point, sellers should have a plan to get back in. They may not time the exact bottom correctly, but it can still lead to profitable returns.

Many bitcoin investors have taken a buy-and-hold approach. While sitting through massive pullbacks in price isn’t pleasant, the upside has more than made up for the downside.

Those looking to invest in cryptos may want to start with a small percentage of their portfolio. And plan to hold indefinitely, even during a downturn, to avoid turning a paper loss into a real one.

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