Bitcoin value in USD took a nosedive over the first couple weeks of 2015. The price dipped well under US$200 earlier this week but is back over that mark at the time of writing.
The catalyst is unclear, but many big events could have contributed to the spiraling price: Bitstamp's temporary closure, the pause on CEX.io cloud mining, and Russia's crusade against Bitcoin websites. Additionally, others noted that Ethereum has been selling off their bitcoins and there are also rumors swirling that investor giants have been selling off in the run up to the Winklevoss ETF IPO.
The typical narrative goes something like this: Investors panic as they watch the price drop, so the selling continues, and the price falls further.
But many Bitcoin advocates are unfazed. Rather, they're deriding people who buy high and sell low. A recent satirical Reddit thread titled “A Guide to Quitting Bitcoin” captures this sentiment perfectly:
Step 1: Panic Sell: Quickly go to your exchange of choice (preferably one located in a country other than your own) and sell all your bitcoin. Don't even risk owning the smallest fraction of a coin. If you really want to commit to quitting, do it right and sell everything.
Step 2: Seek Validation on Your Favorite Bitcoin Forum: It is simply not enough to sell all your bitcoin. To ensure that you later don't have a "change of heart," it is required that you announce your departure. Regular bitcoin users also like to see who is leaving, so it is important for you to tell them. You won't believe how much strangers on the Internet care!
Step 3: Make Sure You Know Your Talking Points: People leaving bitcoin need to have a reason why. Make sure you have one in your pocket especially during step 2. Please choose one of these: "Price Volatility", "Centralized Mining", "Fixed Supply".
Step 4: Enjoy the Freedom from Bitcoin Shackles.
Another user added another six steps to drive the point home. A few months later, Bitcoin isn't dead. Actually, it has soared in price. Awestruck, the investor buys at another peak. The price tumbles again. Then it would be only be natural to repeat the cycle returning to step one and sell in panic.
And sadly, this actually happens. Case and point, a Redditor posted Wednesday: “Just sold 25 bitcoins at a US$180, good luck with your “currency”, I'm out.” The user claimed to have purchased bitcoin at the US$1,100 price peak.
The author of the aforementioned guide responded: “Thank you for reading my guide.”
The nonchalant attitude might surprise. Bitcoin lost 40% of its value so far in 2015, yet Bitcoin advocates are laughing at the desperate sellers.
The thing is, many following the Bitcoin space have seen the currency “die” many times before—30 times now, in fact, according to the site Bitcoin Obituaries, which posts links to articles reporting Bitcoin's demise. Bitcoin has been known for its volatility, and these declarations were often made at a price trough.
Some are laughing. Some are defending. Andreas Antonopoulos, Bitcoin evangelist and host of the Let's Talk Bitcoin podcast, took to Twitter Wednesday:
Bitcoin is not dead. Please submit your obituaries to t.co/5KBoyRTLqK for the collection.— AndreasMAntonopoulos (@aantonop) 14th january 2015
Chastising speculators, he added:
“Bitcoin", the speculative small-cap get-rich-quick investment scheme is definitely dead for now. Bitcoin however is fine.— AndreasMAntonopoulos (@aantonop) 14th january 2015
Bitcoin is generally viewed as a long-term investment. In the long term, maybe these temporary price dips won't matter. But anyone familiar will remind you:
“Don't invest more than you're willing to lose.”
Right now, the whole situation looks like another example of the masses buying high and selling low from fear, panic and, yes, greed that the value will go even lower.
Of course, that's not to say Bitcoin can't collapse in price. But when you've seen it happen before—two times, or 30 times—it looks like just another day for Bitcoin.
Did you enjoy this article? You may also be interested in reading these ones:
- Bitstamp Back In Business
- Interview with CEX.io's Jeffrey Smith on Why They Paused Mining and the Future of the Industry
- Top 10 Quotes from Andreas Antonopoulos's AMA