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Why I Am Holding Onto My Bitcoin

Posted in Cryptos

The following article covers a token or element in the cryptosphere. The cryptosphere is new and exciting, but changes rapidly and often in ways that do not benefit users. By the time this article is published, changes may have already occurred. Most tokens in the cryptosphere are complete scams that are get-rich-quick-schemes for insiders. Often, we cannot know this beforehand and only later discover this. A person should only trade with money that they’re willing to lose because losses are guaranteed. If you choose to participate in purchasing a token in the cryptosphere, you should do so with the full expectation of a loss and you should also expect it to change in a manner that does not benefit you. There are very few good ideas in the cryptosphere. Finally, by reading this post, you agree that you’ve read our disclosure.

Introduction

When I heard our local news talking about the bitcoin price, I had a feeling that bitcoin will correct in the recent rise above $1100 USD per bitcoin. Similarly, there were many anecdotes about how some got out of the stock market when the hairdresser and taxi drivers were giving investment advice in the year 2000. How much of a correction, I do not know. Currently, it seems to be sitting around $900 USD per bitcoin. I am hoping that it will continue to rise, but gradually. I am still holding onto my bitcoin, and here are the reasons why. This is not a recommendation to buy, hold, or sell bitcoin. These are just some of my thoughts on why I am keeping my bitcoin.

Risk in bitcoin

When I bought my bitcoin, I was willing to risk what I had invested. It was a small investment, and I was willing to invest in the amount with the thought that I can risk to lose it all. Whatever you may decide to invest in cryptocurrency, please keep in mind that you may lose it all and only invest within your comfort level. I am still willing to risk losing the whole bitcoin. However, the main risk for me is theft from the exchange, so I will be looking to secure my bitcoin in an offline wallet in the next month.

For goods and services

Although bitcoin is not official currency, I can still use my bitcoin to transact in commerce and business. Of course it will require a vendor to accept my bitcoin, but as time goes on, bitcoin seem to be more accepted. Searches for bitcoin has been rising. Especially in areas of currency instability, where official actions have hurt people holding onto official currency. Bitcoin is a medium of exchange so I do not have to convert them to dollars before I spend them on goods or services. Since I plan to keep mine for the long term, I do not plan to spend them while prices continue to dramatically fluctuate.

Long term chart

The long term chart shows that bitcoin is still continuing to rise. As a trend-following investor, I tend to just look at price. I notice that the price of bitcoin is still way above the 200 day moving average. Even with the correction in January, the price is well above this line. If I ever decide to trade in bitcoin, then I would have to set exits above my entry price and allow the trend to continue until my exit is hit. My exit tends to be the 50 day moving average. I may decide to hold tighter stops as time goes on. Of course, this is a simple strategy, and that is what I like best. But, you have to follow your own strategy for trading bitcoin or any other asset.

Conclusion

I think bitcoin has still room to go higher. It may have faltered after running up too quickly, but it seems like it did not fall off a cliff. There are still many forces that may try to get rid of bitcoin, but it seems China has not deemed bitcoin illegal. As long as people continue to trade bitcoin and report any income associated with it, bitcoin may gain more legitimacy. Because of the decentralized nature of bitcoin, it may be harder to get rid of, but it is not impossible.


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