A Very Special Moment for Bitcoin

For the Bitcoin world, I feel that the crisis we are entering is special for at least two reasons:

This is the first global economic crisis since the creation of Bitcoin at the end of 2008. For a majority of Bitcoin owners, who are more generally from Generation Y, this is the first time they have faced an economic crisis in their adult lives.

Bitcoin was created for the situation we are in now.

It will therefore be extremely interesting to see, in the coming months and years, whether Bitcoin will benefit from the measures that are being taken, and will continue to be taken, by those at the head of the current monetary and financial system.

You will have understood that I am thinking here of the Federal Reserve, and other central bankers around the world, but also of the politicians at the head of the world’s major economic powers.

These powerful people will do anything to save the fiat system, even if it means devaluing even more what you and I have.

As such, I believe Bitcoin will be a perfect hedge against currency devaluation in the difficult months ahead.

However, for Bitcoin to be able to play this role as a bulwark for you too, you will need to be able to use Bitcoin properly. Bitcoin is the only true free market in the world. As such, its price can change dramatically in a very short period of time.

This is exactly what we saw on March 12, 2020 when Bitcoin price dropped more than 50% in a few hours from $8K to just $4K.

This volatility of Bitcoin is clearly double-edged. I would even add that excessive volatility is double-edged in any market. Bitcoin’s volatility can be your best ally, or your greatest enemy. It’s going to depend on the decisions you make, and therefore on how you use that volatility.

On March 12, 2020, I still saw a lot of people make the mistake of selling all their Bitcoins in a panic.

Various studies have shown that a majority of the Bitcoins sold on that day were sold by HODLERS less than a year old. I therefore deduce that many had bought their Bitcoins when the price was above $8K or even $10K.

They therefore voluntarily chose to lose money by selling their Bitcoins at $6K, $5K, or even $3.7K for some on trading platforms like Coinbase.

These people have suffered the events of March 12, 2020.