The bitcoin bubble has taught us five things

The bitcoin bubble has taught us five things

Bitcoin began its incredible run a month ago, tracing out one of the most remarkable bubbles of our time.

The cryptocurrency market’s pricing is plunge around 50% this week.

That was a huge collapse, but what matters now is what happened between then and today.

1. It’s possibly a bubble
It’s most likely a bubble if it looks and feels like one. This time was no different; bitcoin was a frenzy, and the bubble eventually burst.

2. Don’t buy on the FOMO
Be wary of impulse purchases motivated by a fear of missing out. If you ever find yourself thinking, “Other people are making money, they could keep earning money, I need to join in now to earn money too,” it’s time to be cautious.

3. Keep an eye out for sentiment-based value
Beware of the even larger hazard of performing the aforementioned when purchasing something with no supporting evidence. A productive aspect underpins assets such as stocks, bonds, and even real estate.

A company’s ability to put money to good use, pay dividends or interest on bonds, or a property’s ability to generate rental income are examples. Bitcoin’s value was solely determined by public opinion and opinion.

4. Diversification can help you stay safe
If you bought bitcoin or other cryptocurrencies as a minor portion of a bigger portfolio of other investments, the price drop was unpleasant but not a huge issue.

I would clearly prefer that my $870 was no longer worth $380, but as a small part of my portfolio, I can live with it. On the other hand, if I had invested the majority of my money in this one thing, the crypto-collapse would have been a major concern.

5. There’ll always be a new bubble to burst.
Bitcoin was unique; you don’t frequently hear stories like that — and who knows, it might rise again in the future. But something else will bloom and bust, even if it isn’t on the same magnitude.

Because it depicts human behavior and how hope, greed, and fear drive market cycles, the classic bubble chart is effective. Learn more about chart and chart pattern here.

Something new will appear, and it will happen once more.

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However, crypto asset investing, trading, staking can be considered a high-risk activity. Please use your extreme judgement when making the decision to invest in, sell, or to stake Crypto Assets.



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