Question No 2:
Are Cryptos Risky? I Hear They Are Really Volatile.
by Ian King
I won’t beat around the bush: Cryptos can be volatile. Just look at bitcoin: It had a large 93% drawdown in 2011. It saw an 85% correction in January 2015, and there have been many drops afterward as I mentioned yesterday.
But each of those drops created a golden buying opportunity as bitcoin has marched from $1 to about $10,000 in seven years…
So here’s what I say to concerns about the risks: There’s always a level of risk in any volatile investment — just look at options. But that also means there’s the potential for enormous, quick rewards.
That’s why it’s important to find a profit-managing strategy that works for you, limiting your risks. And then you stick to it.
Because with the right strategy, you can actually make volatility work for you, boosting your small investment of, say, $1,000 into a fortune of $25,000 as the crypto markets rapidly expand. Meanwhile, those investors without a solid strategy will be biting their nails during swings in volatility, either jumping out of the game too soon or holding on far too long.
That’s a big reason for why I developed my P.A.T. strategy: I wanted to help Main Street crypto investors profit from the volatility.
Because with my strategy, I actually look forward to swings in volatility.
I know that sounds a bit odd, so let me explain…
Make Volatility Work for You
See, the volatile nature of these assets means that we’re going to have many chances get into great investments for lower prices.
But you might be wondering: How do I know that these swings don’t just mean a crypto — or the crypto market — is about to plummet?
Well, after two decades trading in the market and the last half decade spent investigating cryptos, my experience tells me that more often than not, we can use volatility to our advantage — particularly when you use a proven system.
After all, bitcoin had seven drops of 20% or more in 2017.
Through each of these corrections, however, the network (as measured by number of wallets) continued to expand at a rapid pace. As some speculators saw their value decimated, new investors saw value and became buyers.
So in each of these pullbacks, nervous investors created golden buying opportunities for longer-term holders.
That’s ultimately how bitcoin surged 1,300% last year.
And even in the face of wild price swings, bitcoin adoption continues to grow at an exponential rate. There are about 23 million wallets open globally, chasing 21 million bitcoins.
And that number of crypto investors is going to continue to grow.
In a few years, the number of wallets will likely rise to include the 5 billion people on the planet connected to the internet.
Meanwhile, in the last year, new applications such as Coinbase have made it even easier to onboard new users. And that’s great news.
If you haven’t noticed, when people buy bitcoin … well, they talk about it. Many of us have that friend who bought bitcoin and then wouldn’t stop talking about it. Yes, I’m guilty of this — and I’m sure quite a few readers are too.
Perhaps subconsciously, holders become crypto evangelists and start convincing others to buy, which actually ends up increasing the value of their holdings.
Bitcoin evangelizing, spreading the good word, is what miraculously led to a price ascent from $0.001 to a recent price near $10,000.
Who could have imagined that bitcoin’s pseudonymous creator, fed up with the global banking oligopoly, would launch an intangible digital resource that rivaled the value of the world’s largest currencies in less than a decade?
Not many people.
No religion, political movement, or technology has ever witnessed these growth rates. Then again, humanity has never been as connected
That’s why, despite all of the recent volatility, the overall crypto narrative is intact.
User adoption is still expanding at rapid rates, unimpeded by drops. Investors are still flooding the sector with fresh capital, and not one crypto project has shelved plans for its initial coin offering.
So in the end, it’s volatile, yes. But it’s not as dangerous as many people believe — if you know how to capitalize on this growing market in the right way.
In fact, now is the perfect opportunity to start looking into the crypto market if you haven’t already. It’s time to get a strategy and get in before more Main Street investors wake up to the potential here.
To learn more, be sure to visit www.cryptoprofitsummit.com daily to see pre-webinar previews and posts.
Editor, Founder of the Crypto Profit Strategy