Don't panic! I repeat DON'T PANIC! Ok... you are still panicking... STOP IT! When the market is tanking like it tends to do in cycles, those that are new to the world of cryptocurrency are the first people to start to panic when they see a 40%+ correction in the price of Bitcoin. To any traditional investor, this large of a percentage would mean certain doom for many, but this is just another day in the life of Bitcoin friends. When you are just starting out in cryptocurrency it is hard to spot this fact, but once you have been watching it for a year or 2 you start to see these patterns and notice similar trends.
This is the time when HODLers are made and the weak start to fade. I am in this for the long haul and yes, I too will HODL through the storm. Here are my top 5 reasons you should HODL your Bitcoin when the market is tanking.
- The Bounce - Let's not fool ourselves here, this is the main reason you want to HODL. Just like many, many times before Bitcoin has tanked and lost 40%+ of it's value only to rebound eventually to consistently higher numbers. Those that have been in the game for a longer period of time recognize this, while those that are new panic sell because they think they are "cutting their losses". This is when all the smart investors are buying. I know I am...
- Less Stress - If you are in it for the long run and look at your Bitcoin as more of an investment in the future then you have to maintain a steady hand during these rough seas (see my previous article about maintaining the right trading psychology). Treating Bitcoin as a long term investment and KNOWING you will always HODL has the advantage of less stress when the price corrects significantly.
- Save On Transaction Fees - This goes without saying, if you HODL you don't incur any transaction fees. This means fees for the sale but also the transfer to your bank!
- Avoid Being Taxed - Depending on when you bought your Bitcoin and how much, if you cash out then you will have to pay taxes. Short Term Capital Gains Tax in the United States are no joke and all you need to do to avoid taxes is to not sell your Bitcoin and just HODL.
- Building The Future - If you truly believe that we are building the future with cryptocurrency and you support the "Ethos" of Bitcoin then you HODL. Bitcoin has given rise to more then most can fathom, but the evidence is all there on the blockchain. By HODLing your Bitcoin during volatile times it helps to give some stability to the market and you continue to support the mission instead of just your own profits (not that I don't recommend SOME profits!).
Blockchain technology has always been the back bone of Bitcoin and if you understand the game-changing nature of this, even on a non-technical level, you are supporting the future where big banks are not bailed out by tax payers while their CEO's take home multi-million dollar salaries. You support a future where a global banking oligarchy no longer has control of the average man's financial future. That is the future I see, and that is the future I actively work to build HODLing one Bitcoin at a time.