When the price of bitcoin dropped by 33% in April, some cryptocurrency investors decided that it was
time to abandon the ship. For short-term investors, waiting for a continued price surge as seen in 2017
was not an option, considering that no one can truly predict the future price of any cryptocurrency.
Today, it has been about 6 months since the price of bitcoin peaked at roughly $20,000 in December
2017. The subsequent crash of over 70% in the market value has made some investors to lose their
patience – especially those who bought amidst the frenzied price exuberance last year.
During market selloff, crypto investors and enthusiasts have been encouraging each other to “hodl”- an
acronym originally designed to be a typo for “hold,” but now taken to mean “hold on for dear life.” That
said, new data suggest that the investor’s faith in this principle is dwindling. Rookie investors who are
not used to bitcoin’s roller-coaster price swings are resulting to panic selling as the market continues to
In the US, customers of Coinbase (the largest crypto exchange in the country) withdrew more in June as
compared to April – a month when the price of bitcoin was taking an upward trend. This trend has also
been noted in Paymium, one of the earliest crypto exchanges in Europe. According to an analysis done
by chime based on over half a million bitcoin enthusiasts, the younger generation of investors has no
confidence in the recovery of this coin.
Why Investors Are Not Ready to “Hodl”
With the price of bitcoin hitting about $20,000 late last year, the thought of quick returns and getting
rich is what came into the mind of most rookie investors. Those who believed in bitcoin took mortgages
on their houses to purchase these digital assets, while some poured their lifetime savings into this
venture. However, the current price fluctuation in the market is making such investors feel squeezed and
pressured to tap out.
On the other hand, early bitcoin adopters (long-term investors) are also deciding to sell their digital
assets for various reasons. To some, the fear of losing out is the major contributor to cashing out. The
study also shows that long-term investors sold close to $15 billion worth of bitcoin to speculators in the
first quarter of this year.
According to the money flow patterns in the cryptocurrency industry, the investor’s timing is generally
poor. It’s in the nature of most investors to buy when the prices are at the highest and sell at a
significantly lower price. This is largely evident according to major crypto exchanges like
paymium, coinbase and others.
While we can’t tell whether bitcoin will dominate the cryptocurrency industry in the future, we may look
back at the current price rate in a few years and see that it was a great time to invest. However, you
should only invest what you can afford to lose for you fulfill your long-term investment goals without