If you know what I will be sharing with you, you will succeed in the crypto business. Trenndify community has been a great crypto platform that brings common minds together, to create a platform of learning and solutions for members.
During this week, one of the members of the community sent a meme to the group, which made everyone laugh. When I saw the meme, I also joined the league of those laughing.
I know you are already curious; you want to know what the meme is about. I will tell you soon.
Yes, the meme was a video which has a goalkeeper and a player, with a football. The goalkeeper represents BTC and the player represents the trader.
In the video, the player tried to score, the goalkeeper was moving up and down until the player became very confused.
It is just a story of the volatility of bitcoin price in recent weeks. Adding to the Elon Musk announcement that Tesla will not accept btc for payment unless a renewable energy is used for mining, China also crackdown on miners.
It was a week where miners were selling btc (miners capitulation) to migrate from China. Therefore, the price of btc crashed to an 2021 all time low of $29,000.
While everyone was disappointed, some smart people knew that was a great money making moment. I received many messages about what was happening and my reply was always “buy when the street is bloody”.
But, one company and one crypto legend did something extraordinary during the decline in price. Microstrategy bought more BTC.
I will show you the reason behind his strategy and what you should also do during a bear market.
Why is MicroStrategy Buying the Dip when BTC Price is Declining?
Michael Saylor is a futuristic entrepreneur I will ever respect. I will respect him not just because he is a supporter of bitcoin standard and crypto adoption but because he is a visionary. He sees the future trend before other entrepreneurs and investors do.
One of the strategic things he has been doing is to buy BTC whenever there is a decline in the price. Many people want to know why he does that even when the media and twitter celebrities are criticizing him.
Here are the possible reasons;
- Cost Averaging Strategy:
Cost averaging is when an investor invests a certain amount in an asset periodically regardless of the state of the market. According to experts it helps to protect the portfolio against volatility.
It also means, the average price of his BTC in the portfolio will decrease whenever he buys the dip. Is this not a smart strategy?
2. The Potential of Bitcoin:
One of my favorite investors of all time is Cathie Wood, she predicted that the price of BTC will be $500,000. That may sound impossible but the fundamentals of btc points to that reality.
One of the fundamentals is the scarcity feature of bitcoin. If we have only 21,000,000 btc to ever exist it means there is a fixed supply.
This is why btc should be a monetary standard; it will help to protect assets against inflation.
3. The Long term Focus:
In the early days of the internet, there were only a few advocates, many never knew it could be a massive lever that would add trillions to the global economy. The internet produced many tech companies and ecommerce brands such as Paypal, Amazon etc.
This is how the blockchain and crypto revolution will also trigger massive growth. Those that will benefit more are people like Michael Saylor. He might become a trillionaire when the time comes.
Well, the future is always long to short term minded people but it is short to long term minded people.
In the next section I will briefly explain what you should do during every bear phase of the crypto market.
Three things to do during the Bear Market
- The Income Strategy:
The principle of investing is to put your income in an asset in order to generate returns. But, what will you invest when you don’t have an income?
This means that you should always work and save in order to maximize the opportunities in the bear market.
Imagine, you have $100,000 to buy BTC when it dropped to $29,000. In a few weeks time you will be smiling everywhere you go. So, work to earn more and save to invest during the market downturn.
- The Plough Back Strategy:
I have taught the strategy of hedging your holdings when your portfolio yields good returns. The essence for that strategy is two; one, to protect your portfolio against volatility and two, to give you the ability to buy more assets when the market presents an opportunity.
As you already know, the market will always present opportunities.
So, those who have USDT in their portfolio, use the funds to buy BTC at a huge discount. This is the secret of growing $1000 to $100,000.
- Psychological Strategy:
Those who are affected by the bear market should ensure they are sane. What I mean is that though it is not easy to see your $200,000 turn to $20,000, but you should know that the market is so.
So, one of the ways to avoid worry and depression is to not check your portfolio always. Also, with the right knowledge you would not be worried because you know the market will return and even outperform where it was.
According to Rothschild buy when there is blood in the streets, even if the blood is your own. That is the strategy to make it in the financial market especially in the crypto space.
What will you do if your portfolio grows by 300% in two months to come? Comment below…