Should You Trade Bitcoin Or Just Buy & Hold?

hey guys in this video we’re going to be answering the question should you actually trade Bitcoin or just buy and hold it so recently I’ve been getting a lot of comments from people saying things like don’t actually trade Bitcoin just buy and hold it and you’ll get rich and well if we look over the past couple of years it’s obvious that if you bought Bitcoin down here around two or three hundred bucks and you are still holding when it reached over two and nearly three thousand dollars that would have been an incredible return and a lot of people made life-changing amounts of money over the past couple years so yes the buy-and-hold or as I like to call it the bye and hope strategy works really well when the markets have incredible gains and Bitcoin has been the best-performing market on the planet for the past couple of years but if we think about the total number of people in the world that own Bitcoin right now which I have no clue exactly how many people that is some people estimate that to be around ten to fifteen million people the fact is that really only a small percentage of people that currently own Bitcoin bought Bitcoin down here in the 200s and the large majority of people that have purchased Bitcoin for the first time did so above $1,000 how do we know that well it’s very very simple the fact that price broke out here above $1,000 just a couple of months ago and quickly tripled to $3,000 in you know really just a few weeks it didn’t just magically happen for her for the market to go up like that people had to buy there was a tremendous amount of buying pressure that caused that right people had to buy at these levels for it to go up this far and because of human nature people tend to buy something when it’s hot or popular right that usually means when price is higher and a very high percentage of those people that buy high typically end up panicking and selling low when the price falls by 50 percent or more as we’ve seen Bitcoin do several times over the past few years you know if we just take a look here at Google Trends this is the you know Google search interest over time for the keyword Bitcoin you’ll notice that every time Bitcoin becomes popular with the general public you get a spike in interest it happened during the first bubble of 2013 it happened during the China bubble in November of 2013 and you can see it recently reached its highest interest point globally over the past couple of weeks right and so that just really correlates with every time that you see price go up a lot now the same thing actually happened in the US stock market during the 2008 financial crisis a lot of people were buying the stock market at all-time highs here and many people were actually doing it because Jim Cramer was on CNBC pumping the hell out of stocks right before the crash and you know a lot of people actually sold their stocks when the market fell by about 50% and then because they were afraid of the stock market at that point they ended up missing out on one of the biggest bull markets in recent history now if you’ve been in Bitcoin for a few years you know how volatile the price can be and bitcoins actually had several bubbles and the beautiful thing is that at least so far every bubble after it pops prices were covered and made a new higher high so yes in theory if you time it right which is very hard to do and most people don’t do it right and you buy on the panics and then a hold long term you would have made great returns but just like people panicked in the stock market for those of you that weren’t around in the Bitcoin world in 2014 I want to show you what happened and I’ve talked about this in past videos but it’s such an important lesson and I think so many tens or hundreds of thousands of people can get value from this that I really want to hammer it because what happened in the later part of 2013 right that was here on the Bitcoin interest chart you’ll notice that price went from about a hundred bucks back here up over a thousand and there were a lot of people that were buying Bitcoin here and there were many news articles that were coming out calling for Bitcoin to hit five thousand or ten thousand and that’s what enticed people to buy so high and then a lot of people actually panic sold losing 50 to 90% of their investment over the next year during the the bear market of 2014 how do I know that well I got literally hundreds of emails and messages and tweets from people saying Chris I screwed up I bought really high and I just panic sold and I actually got a couple of emails from several people that sold here below 200 which turns out to be pretty much the all-time low of the past few years and one thing I want to show you for anybody that’s looking at this you might be thinking like how well I would never do that right like that’s stupid obviously in hindsight you want to buy low and sell high and what happens though is imagine you bought at $1,000 right and then prices going down and then I want to show you this website so on 99 bitcoins there’s a section of this website that talks about Bitcoin obituaries it’s pretty funny it says Bitcoin has died 138 times basically any time the news posts an article about Bitcoin is doomed they add this to this list and so if we go back now to the later part of 2014 okay so we’ll start in like October November of 2014 which is right around here right which in hindsight again is the all-time low before Bitcoin went on its multi-year bull run but just read some of these articles and again imagine that you bought out a thousand dollars and then you start seeing articles like this where did Bitcoin go wrong and this is when the price is at 333 Bitcoin is bust why investors should abandon the doomed cryptocurrency ah so these are like some really scary headline December 2014 Bitcoin Bears say I told you so right and then all you do is you see the price going down and down and down and then check this out if we scroll up a little bit further we see this when price was a hundred and eighty two dollars we actually bought it at one hundred and eighty eight by the way but when when price is 182 Bitcoin plummets and it may be stuck in a self-fulfilling downward spiral again imagine you voted a thousand and you’re down like eighty percent on this like that’s why people panic cell at the bottom right so for anybody that just blatantly says like oh just buy and hold on in theory that sounds great but the reality is is that most people don’t do that because of price volatility okay you know just like the past videos I did when every time Bitcoin crashes people typically freak out and sell the lows so I have a couple of questions to ask for anybody that has kind of a bye and hope mentality meaning I just want to buy and then just hope that it keeps going up forever are you willing to hold the coins that you purchased if price crashes by say ninety percent from its current price okay so let’s just let’s just you know round off right now and let I know bitcoins a little bit higher than this but for simplicity sake let’s say Bitcoin is at two thousand dollars okay and let’s say that you bought at twenty five hundred and so you’re a little bit upside down right now the question is is if Bitcoin crashed ninety percent from where it is right now would you still be willing to buy and hope that it keeps going up now obviously if you bought at two hundred and it crashes ninety percent you know you’re not going to have as much fear and pain because you bought it a much lower price right but again the reality is that because price went up so much so quickly a significant amount of people purchased up here right so my second question would be what will you do if you wake up tomorrow and bitcoins prices down 20% 30% 50% great and again I’m not saying that’s going to happen but what I do say is again anytime that bitcoins price goes up by more than a hundred percent in a very short period of time that’s a sign that a pullback could come right and now we saw pretty big deep deep pull backs back here you know even in March right we went from like 1300 down and stabbed below 900 or you know back in January you know eleven or twelve hundred down into the 700s right that is a very big percentage loss but you can see every time that happened at least so far it’s recovered right so again I’m not calling for like the top in Bitcoin I’m not saying doom and gloom what I want to do is I want to get everybody thinking about a plan of action because the buy-in hope mentality has never worked for investors right it you know people that bought gold at the height in 2011 end up losing 30 40 almost 50 percent of their value right same with real estate and you know the the 2005 area right people that bought at the the top ended up some of them losing 60 70 percent of their value so what I would suggest everybody do no matter if you consider yourself an investor a trader an entrepreneur or whatever is just ask do you have a plan for every possible market move meaning you know and this is a personal question like where did you buy if you did buy what would you do if price pullback and retested the the prior breakout area what would you do if it held up here above 2000 and broke out to a new high right these are the questions that you want to start thinking about that way you don’t get surprised by market activity because a lot of people that don’t know and they just kind of buy out a price and then they wake up and they see prices down by 50 percent the next day a lot of them just panic selling and rightfully so I mean that’s human nature right so instead of doing something like that let me tell you how I approach this and and maybe what I think would be a much better way I actually have two strategies okay I invest for the long term when price is cheap okay so just like you know nobody wanted to accumulate Bitcoin and 2015 when it was around 200 that’s when it’s cheap right when it’s a value play and then when when price is high I like to trade big volatility when the price is high so what does that mean well there’s several different trading strategies and I’ll give you my top five types of trades right there’s a few different ways that we do this so again number one is pretty much what I just said long term accumulation when prices are cheap meaning you buy you can’t you put it in cold storage and you kind of forget about it right number two is when you actually can short meaning you can make money when the price of Bitcoin Falls whenever you see breakdown patterns right when it’s expensive right so just like I got a lot of hate in 2013 when I was shorting Bitcoin on these pops and throughout the bear trend and we had breakdown patterns right like people were like Chris why are you so negative on Bitcoin I wasn’t negative on Bitcoin I just saw the potential to make some money as the price was going down or at least hedge your losses right like if you’re holding Bitcoin long term the value of those is going to go down in a bear trend but if you’re shorting and you’re doing it the right way you can actually make money or at least hold you know the same value so number three is I also like to trade volatile altcoins to increase Bitcoin holdings so right now we’ve been in an IC o—- bubble right there have been so many crypto currencies that are coming out there’s been incredible volatility in crypto currencies and you know if we just take a look at like aetherium right now you can see that this has been incredibly incredibly volatile recently where it went up many hundreds of percentage points and then you can see it’s been pulling back a very big percentage just over the past few days so there’s been a lot of activity in here and there’s been a lot of money to make actually actively trading this stuff right you know and you can see again like on coins like Stratus that went up thousands of percentage points you know even just a regular pull back in these markets on a percentage basis can be really really big trades right and so what a lot of people do you know and I always say like 90% or more of altcoins are going to go to zero eventually most of them are going to turn out to be worthless but that doesn’t mean that you can’t make money trading them in the mean time all right to increase your holdings number four is I like to buy Bitcoin on massive panics right bounce plays we’ve had several of these recently where you can actually make money either scalping or swing trading bounce plays you know every time that the market has panicked off over the past two years we’ve had really nice bounce plays and I’ll give you even a older example going back to 2014 the first time that that Bitcoin actually sold off below 500 I bought here at 502 and then caught the uptrend up to 900 right so there was a really nice what we call swing trade it was a couple of weeks long from about 500 up into the high $800 mark right so that’s what I mean you know when people are panicking and selling at the bottom that’s oftentimes a really good opportunity to step in now you have to have a lot of confidence if you’re trying to buy big washouts you have to be pretty good like that’s more of an advanced thing because if you think about it when you’re buying it it’s when things look really really ugly so you have to understand risk management very well and then number five and I think this is probably the most important thing for new traders is stay away from choppy price action right like don’t over trade we talked about this in the last video but it’s so important that I wanted to say it again you know I just I don’t day trade bitcoin you know there’s a misconception people say Chris how do you day trade bitcoin I don’t typically day trade bitcoin most of my trades I hold for several days or weeks on average right I’m not in here trying to scalp every little move it’s only when there’s increased volatility and increased profit potential that I’ll even consider taking a day trade but I think it’s it would be a mistake to come in here and to try to take scalp trades every single day in the crypto markets they’re just they’re not liquid enough in my opinion you don’t have the volatility and because of the exchange issues that we’ve been having recently which I’m not even going to go to in this video that’s another reason that you kind of want to stay away from doing that so hope this is helpful guys again you know just some key points it’s okay to invest in hold Bitcoin long term but just be aware where you’re actually doing that right like if you’re if you’re buying high ask yourself those questions and ask hey am i somebody that would be interested in actively trading when the price is high and when there’s big volatility and if the answer is yes to that I have a free Bitcoin basics course I’ll link that up below if you want to learn more information you can reach out to me leave a comment if you have a question in the videos I try to get to as many as I can and again thank you guys for watching I hope you get a lot of value out of these videos and I will see you in the next one take care

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