How to operate when Bitcoin surges

Source: Daoshuo Blockchain

Both Bitcoin and Ethereum have experienced large gains in the past few days.

As of the time of writing, Bitcoin has exceeded $57,000, and Ethereum is about to cross $3,300.

Whenever the crypto market experiences a rise, there will always be readers asking whether there will be a correction in the market, or even more detailed, asking how much the correction can be.

Readers who have read my articles for a long time know that I cannot answer such questions.

If I could know whether there would be a correction or even how far it would be, then I would be rich by shorting directly on leverage, and there would be no need for time-consuming and laborious fixed investment.

I have actually said it many times in previous articles: As fixed investment investors, we do not need to watch the market every day, we only need to look at the market when our fixed investment time comes. The purpose of our looking at the market is not to guess whether the market will continue to rise or usher in a correction, but to see whether the market at that time is within the fixed investment price we set.

If the fixed investment price is within the fixed investment price, continue to invest. Otherwise, immediately remove your attention from the market, forget about the market, forget about the market situation, and concentrate on looking at the project, watching the progress, studying, and thinking.

When we truly regard fixed investment as the basic investment strategy, most of the time, we do not need or need to pay attention to the market.

Taking myself as an example, my understanding of the market is often out of touch. Many times, it is only after my friends send me messages that I find out: It turns out that XXX has risen so high, and it turns out that XXX has fallen. It's so low.

Some readers mentioned another problem:

His fixed investment started relatively late, only in the second half of last year, so there is still a considerable amount of bullets that have not been used up. However, the prices of Bitcoin and Ethereum are now so much higher than the set fixed investment price, so what should we do next?

I remember that many readers asked this question during the last round of bear market investment. This is a problem that many investors will encounter.

To be honest, I don’t actually have a good solution. I only have some very compromise and last resort options for reference.

Let’s take Bitcoin as an example to analyze the embarrassing situation that investors may encounter now.

First of all, let’s go back to a fundamental criterion: How high is the potential return on investment now?

As of the time of writing, the price of Bitcoin has exceeded $57,000.

My more confident guess about the price of Bitcoin in the next bull market is over $100,000.

If we target a price of US$100,000 and continue to invest now, and if the price of Bitcoin is not less than US$57,000 in the future, then our potential income will definitely be less than 1 times. Regarding this potential rate of return, investors have to ask themselves a question:

Can I accept it?

If it is possible, then the second question will pop up immediately: Since it is a fixed investment, at what price do I plan to keep investing? $60,000, $70,000, or higher?

Based on this reader’s description, I guess he may still have a lot of bullets in his hand, and what he hopes in his heart is to get rid of the bullets quickly before Bitcoin really hits the market. If you follow the fixed investment method, it means that the fixed investment price should be set relatively high. However, the higher the fixed investment price is set, the higher the average cost will be and the smaller the return will be. The actual return may be far less than 1 times.

Can investors accept this situation?

Seeing this, some investors will have another idea: they might as well not invest at all, but shoot out all the bullets at the price line of US$57,000, locking in nearly 1 times the income, so as to avoid future losses. Just messing around.

If you are lucky and Bitcoin continues to rise or the price will not fall below $57,000 even if there is a correction, then of course there will be no problem.

But if you are unlucky and encounter a big correction in the market and the price drops below 57,000 US dollars or even more, then investors will see the ridiculously low chips and see their hands empty. I would be extremely tormented inside:

I really shouldn’t have been so impulsive at that time. It would be better if I could save some bullets now.

Faced with this kind of suffering, can investors accept it and face it calmly?

Of course there is another simpler way:

Let it go completely and stop investing.

This method avoids all the previous emotions but will fall into another kind of hardship:

When everyone is watching the market rising, I only have a few stocks in my hand. With only a few pitiful chips and a handful of stable coins, the feeling of loss and abandonment will make people extremely regretful.

So no matter what choice investors make at this stage, they cannot have the best of both worlds and must face the possible consequences.

So for investors at this stage, the only way to judge which method is appropriate is to ask yourself:

Which of the above embarrassments can I bear, and which one can I bear? One method is suitable for me.