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How to handle a Cryptocurrency’s Highs and Lows

Volatility has always been one of the main deterrents that hold people back from investing in cryptocurrency. And who can blame them? Bitcoin, for example, has seen highs and lows in the crypto market that would make your conservative shareholder scream with excitement, frustration, and then back again in the span of an hour.

While others are opting to invest in real-world assets like the gold or the housing market, there are risk-takers that aren’t afraid to play with cryptocurrency. However, these same risk-takers are mostly inexperienced and are too skittish with their investment. As soon as they see a cryptocurrency dropping, they’ll bail out as fast as their assumption.

This is one of the many reasons that contribute to the volatility of the market in the first place. Another is that regulation of the currency is as young as the technology behind it. This, in turn, allows market manipulation to take place and discourages investment from those who are curious about the industry but doubtful about its stability.

But even with cryptocurrency being volatile, some experts are still encouraging people to not be afraid of the technology. They even suggest that they should invest. But how? Are there any guidelines to follow in order to take advantage of this growing digital currency?

Roger Ma, the founder of financial planning company Lifelaidout, said that people should control their initial reactions when a cryptocurrency dips. He said that long-term goals should be the primary mentality that governs the mind of those who wants to invest in the crypto realm. As such, daily changes shouldn’t affect what an investor feel about the market since it’s the long-term that is to look out for.

To put simply, before making a decision to pull out on an investment in a cryptocurrency, one would first need to step back and view the bigger picture. While weathering value-decline may be too much for some, it’s actually one of the solutions that can eliminate a cryptocurrency’s volatility altogether.

And this stability is slowly being attained as shown by the data surrounding Bitcoin. During its first few years, the value swing of the cryptocurrency was 300 percent annually. Now, it has gone down between 50 and 100 percent on a yearly basis.

Cryptocurrency researcher Daniele Bernardi said that this decrease is attributed to people not wanting a short-term, high-return investment. Granted that not all of them has this perspective, but the majority seems to be shifting towards long-term thinkers judging by the data we’re currently seeing.

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