If you’ve been keeping up with the cryptocurrency latest news, Warren Buffett has recently told the public about his opinions on cryptocurrencies. They are not for the weak of heart. Here is how you can make out of those predictions and what exactly Warren Buffett said.
Billionaire investor, Warren Buffett recently stated that cryptocurrencies are headed for certain death. He also mentioned that there the future for cryptocurrencies will be shortlived. He is almost certain that it will come to a bad ending.
If that isn’t scary enough, the popular cryptocurrency Ripple recently plunged almost 13% of its original value. Meanwhile, Bitcoin shed nearly 8% of its value. For Bitcoin investors and many other cryptocurrency holders, holding on to crypto coins that people believe is a fraud can be nervewracking. Many people are refinancing their houses and getting second mortgages to get involved in the cryptocurrency market.
Trading cryptocurrencies are unlike trading traditional investment assets. With traditional investments, don’t have to check your phone every five minutes to see the current condition of the investment. With cryptocurrencies, things can get emotional especially because you can keep track of it by the second. This is not good for an investor’s mental health.
Here’s how you can keep calm during this emotional rollercoaster.
- Don’t check your trade every five minutes
One of the best reason that people were into Bitcoin in the first place was that it is highly volatile. This is what made it irresistible or investors. From the context of social psychology, people typically get hooked on something when you promise to reward them using an uncertain time frame. However, don’t be one of the people who fall into this trap. By checking the progress of cryptocurrencies to regularly, this is unproductive for you. In fact, you have no control over the price movement itself.
Instead, get your phone to set up alerts when it reaches a market price that you want to sell off the asset. Keep in mind that the cryptocurrency market is not as liquid as the traditional investment market. Therefore, it is difficult for you to realize the gains that you see on your phone screen. In fact, even if you were to obtain gains from your investment, you can’t cash out as instantly. You will need to wait for several days before the cryptocurrency transaction is complete and during that period, the value can fluctuate.
- Consider long-term investment strategies
When people buy or sell in the cryptocurrency market, they tend to miss the bigger picture of cryptocurrencies. Today, it is no longer any question whether digital currencies are going to be part of the future because it has grown exponentially. In fact, it’s not unreasonable to assume that we will all own cryptocurrencies in a few years time. Above anything, blockchain is the most valuable thing about cryptocurrencies. It has a great potential to grow in the future.
However, fluctuation associated with the cryptocurrency market can be too much to bear for some people. If it is causing you to lose sleep and period you’re feeling at night, you probably shouldn’t be trading cryptocurrencies. When it comes to cryptocurrencies, it is very difficult to expect people to be rational, but many people who have been lured into the Bitcoin market when they did not have a full understanding of why they are buying it.
- Diversify beyond Bitcoin
Experts believe that people will feel more settled in the diversifying the cryptocurrency portfolio. Fortunately, there are more than 2000 other cryptocurrencies which you can choose from. Diversifying is also very useful because it is too early to determine which cryptocurrencies will make it or not.
- Don’t invest more than what you can afford
One of the most important advice that any investor can take before they enter the cryptocurrency market is to put a limit on the amount of money that you put into cryptocurrencies. Creating an asset allocation model ensures that you remained disciplined to keep an eye on your finances. Today, there are too many people jumping into the market because they are being influenced by the hype.
In fact, it is not just the owners of cryptocurrencies who are stressed out. People who are not buying any cryptocurrencies are feeling very stressed out as well because they felt like they missed out on an important opportunity. Either way, you will end up feeling anxious. So, try to minimize your anxiousness by ensuring you will still have finances for a rainy day.