Bitcoin has been around since 2009. Since then, the cryptocurrency market has exploded in popularity amongst investors looking for alternative asset classes. But it’s also seen its share of ups and downs.
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While Bitcoin has generally climbed back up after a significant dip, such a volatile investment can be stressful for those who’ve added it to their portfolios. As for those who are still on the fence about jumping on the crypto bandwagon, those sharp fluctuations can be mighty off-putting.
So, what should you do if Bitcoin plummets? The strategies will depend on whether or not you currently “own” this cryptocurrency. That said, here’s what some experts suggest.
Sell and Invest In Something Else
If you have Bitcoin, you might want to get rid of it.
“My belief is that if someone has speculated in Bitcoin (note, I didn’t say invest) that they should immediately sell their position and invest in assets that have intrinsic value,” said Robert R. Johnson, PhD, CFA, CAIA, professor of finance at Heider College of Business, Creighton University. “The crypto market has never been a good place to invest. At times it has been a profitable place for some to speculate.”
Of course, your decision will be based on a variety of factors, including how much you’ve already invested and whether or not you believe it will rise in value again. Still, Johnson’s belief is to “just say no” in respect to crypto — including Bitcoin.
“I can think of few worse strategies than committing investment to cryptocurrencies,” he said. “One cannot invest in the wide array of cryptocurrencies, one can only speculate.”
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Don’t Panic
Naturally, the idea of selling what you have and investing in something else won’t work for everyone — especially those who are already in deep. If Bitcoin plummets, don’t panic.
“For current holders, avoid panic-selling,” said Lauryn Grayes, an investor in crypto and founder of Wealth Gems Financial. “Bitcoin is a long game and has rebounded after every crash. If anything, buy more at a discount.”
And if you don’t currently have…
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