Bitcoin Plummets Below $6,000- Why You Shouldn’t Be Too Worried

Bitcoin and other alt-markets are taking a huge hit right now, leaving many wondering if they should sell off, or trudge on through. It’s been a shaky year for digital currency investors, particularly these last few months. Overnight, BTC plummeted below $6,000 and it wasn’t the first time it happened this year. You may remember, this past June we saw BTC drop below the $6,000 mark, before spiking to $8,424.27 in late July.

It seems the roller coaster never ends, and some just can’t take the pressure. But before you decide to do something regrettable, there is hope and reason you should stay in the game and not sell off all your digital investments.

Bitcoin’s narrative

According to Meltem Demirors, Coinshares Chief Strategy Officer and founder of Athena Capital, it all boils down to the struggle with the narrative surrounding Bitcoin. Bitcoin, she believes, is building up to a rally in the future.

“Really, the only metric we have for most cryptocurrencies is the price, and price is just an imperfect metric,” says Demirors. The struggle is partly due to the fact it’s hard to pin down what actual utilization looks like.

Source: CNBC 

Patience, patience

Patience is a virtue as they say, and that couldn’t be more true than for crypto holders. There in the same boat as internet stock holders. Think about how it took Amazon’s stock 9 years to recover, and Microsoft took 15 years after the dotcom boom. We were dealing with a bubble then, and we are dealing with a bubble now.

Demirors also points to the fact real businesses are being built from the ground up with these investments in digital currencies, and like company stocks, these things take time. In the grand scheme of things, we are still in such an early stage of blockchain development but as we can see from what’s going on in the colossal sphere of Bitcoin news, governments and businesses are seeking to change the world with this emerging technology, and that will reflect in crypto values over time.

It’s not just about price

When examining the growth of Bitcoin and other digital currencies, looking at only the price can be misleading. There are other ways to analyze these markets. Two other metrics we can use are (1.) total addressable market (TAM) and (2.) market penetration rate, Demirors points out. For instance, you could look at how many people on a daily or monthly basis are using these assets.

Bitcoin didn’t even exist until just 10 years ago, and the world is still learning how to use Bitcoin. You have to admit, the learning curve is high – most people have still yet to wrap their head around what a Bitcoin is let alone how to download an e-wallet. But despite that, Bitcoin has already reached a high of $20,000, more than many people ever thought possible.

The bottom line here is there are many other data metrics besides price that can offer a more accurate measure of a crypto’s value. Crypto is not in crisis, it’s in a growth stage.

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