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I’ve recently seen a lot of comments on my videos and some people saying, “Don’t trade bitcoin, just buy and hold and you’ll get rich.”
Well, if we look back in hindsight over the past few years it’s obvious that if you bought Bitcoin in the $200’s and were still holding above $2,000 that would be an incredible return.
So yes, the “buy and hope” strategy works well when markets have incredible gains – and bitcoin has been the best performing market on the planet for the past few years.
But if we look at the total number of people around the world that own bitcoin (which I have no clue exactly how many people there are), the fact is that only a small percentage of those people bought and held bitcoin from below $200’s.
There’s a large majority of new people that have purchased bitcoin for the first time above $1,000 – that’s why the price went from $1k to $3k in just a few weeks. It didn’t just magically happen. People had to buy at those levels for the price to go up.
And because of human nature, people tend to buy into something when it’s hot or popular. That usually means when the price is high. And a very high percentage of those people that buy high end up panic selling when bitcoin’s price falls by 50%+.