Bitcoin’s price doubled this year, spiking from $3,200 to $14,000 before settling into its current price of roughly $7,000.
In bitcoin terms, a very disappointing year.
Not as bad as 2018, when price fell 86 percent, but it’s also not a great way to end the year with a 50 percent drop.
When you add in the seeming dearth of actual blockchain usage and hear everybody telling you bitcoin has died, you may doubt whether to stay in crypto.
After all, cryptocurrency is an unproven technology trying to solve huge problems in ways nobody’s ever tried before. You have no roadmap or guide. You’re probably not even sure what the destination should look like.
Along the way, bitcoin crashes. Crypto exchanges fail. Trading platforms go bankrupt.
Ambitious projects miss deadlines and push back milestones. (Cough, IOTA coordicide, cough, everything Cardano does).
At what point do you give up on crypto?
Look not at price action, but action around the price
I don’t expect cryptocurrency will die, but it might.
You will never know from the price, though.
In speculative markets, prices reflect psychology. With no agreed-on measures of a cryptocurrency’s value and scant performance history, nobody can tell you whether a price drop means death. All cryptos are volatile—always have been, always will be.
Look not at price, ye.
Instead, look at what’s going on around you. Has development slowed down? Did implementations fail? Is network traffic sagging?
What about private investments—are investors bailing en mass? Did the money dry up?
Subscribe to newsletters, read trade magazines, and talk to people in the industry. I hesitate to recommend a YouTube channel, but if you must use YouTube as a news source, watch DataDash for balanced perspective. I suppose you could also watch a few different channels with conflicting viewpoints, instead, if you have the time. Stay balanced.
You could also follow the news or Twitter, but crypto outlets pretty much parrot each other’s stories and lead with the most clickable information. As a result, you get a very skewed, narrow perspective that mostly reflects what people care about in that moment.
That info is useful, but can you really make financial decisions based on what hits the top of a Google search or pops up in your feed?
Big movements matter most
Personally, I don’t worry about the one or two failures that happen to make the news cycle—governments banning crypto, miners getting kicked out of places, some altcoins dying, exit scams, things like that.
Those events don’t fundamentally change anything.
China has cracked down on cryptocurrency for years. While it’s possible they finally crushed it, how do you explain the continued growth of Chinese projects like NEO and VeChain?
Instead of stressing about every little twist and turn, worry about more widespread problems. For example, whales fleeing, institutions leaving, multiple exchanges failing, numerous blockchain businesses shutting down, massive job losses, other developments that portend doom.
Things that have not happened yet.
If the actual technology starts to lose traction, if the actual projects fail, if the market runs out of money or momentum?
Ok, then maybe it’s time to rethink things.
Today, we simply have to accept that bitcoin’s price has dropped for a few months. It remains among the best-performing assets on earth for 2019. Some altcoins are doing ok, too. No sense reading any further into it at this point.
Some day, bitcoin may fail and die, along with the entire cryptocurrency industry. We shall see, won’t we?
Until then, relax and enjoy the ride.
Mark Helfman is a top writer on Medium for cryptocurrency, finance, and bitcoin topics. His book, Consensusland, explores the social, cultural, and business challenges of a fictional country that runs on cryptocurrency. In a past life, he worked for U.S. House Speaker Nancy Pelosi.