During the recent sharp decline of encrypted digital currencies, I conducted a small questionnaire survey in the community to understand the trading of bitcoins by community users during this period. It was found that among the respondents who answered the questionnaire, more people increased their holdings of Bitcoin during this period. I think that for Bitcoin, a long-term steady increase in holdings is the best investment strategy. Of course, if there are users who are good at short-term trading operations, then the trading strategy is also a feasible strategy. But for the vast majority of investors, long-term purchase by means of fixed investment is the best holding strategy in my opinion.
The current adjustment is obviously the result of excessive speculation in the encrypted digital currency market and a large amount of leverage. The fundamentals of the development of the so-called encrypted digital currency market have not changed. As the absolute leader in encrypted digital currency, Bitcoin will continue to maintain its leading position in the entire encrypted digital currency industry.
In the short term, Bitcoin is a virtual commodity, and the market demand for it is also in line with the general trend of demand for bulk commodities. Commodities are currently on the rise, so the rise in the price of Bitcoin is in line with the current general trend.
In the current stage of adjustment, although the overall market has fallen sharply, some buying behaviors in the market are still very obvious. As we can see from the table below, Coinbase users are buying in large quantities and sending them out of Coinbase. Obviously these users are buying bitcoins for long-term holding purposes.
On the other hand, users on some other exchanges have seen a lot of selling. If we compare such a trend with recent buying and selling trends, we can see the profitability of users in different regions from buying and selling Bitcoin.
The buying and selling behavior of Bitcoin shows that holders have different views on Bitcoin. Obviously, most forces in the market still use Bitcoin as a trading product. This can be seen from the recent sharp drop in the market and the substantial use of leverage. But another user group adopts the strategy of buying and holding for a long time. I think that for most investors, long-term holding of Bitcoin can get the greatest benefit of Bitcoin. My previous series of articles have explained this.
A popular view now is to compare Bitcoin to digital gold. But I think Bitcoin is far superior to gold in all aspects. Another analogy is to compare Bitcoin to Amazon in the Internet era. But I think Bitcoin is also far superior to Amazon’s stock. Bitcoin is a fully distributed, fair, globally accessible and open currency network. Anyone can get bitcoin fairly by participating in mining or buying and selling. The total number of bitcoins is only 21 million. Now anyone has the opportunity to obtain a portion of these totals. This is similar to that anyone can obtain Amazon stock during Amazon’s development. If you hold it for a long time, you can get the benefits that Bitcoin can generate in the future. The total amount of Bitcoin is limited, that is, the supply is limited. When the market demand maintains a certain or even continuous growth, its unit price will definitely continue to grow. This is determined by the most basic supply and demand relationship in economics. Judging from the current development trend, the global acceptance of Bitcoin has grown rapidly. For example, on Monday (April 26th) in US time today, two very influential news is that Chase Morgan began to provide bitcoin fund services to its users, and the other is that a professional NFL athlete began to use bitcoin to accept his Full salary payment. Beginning this week is the quarterly time for the announcement of the financial reports of listed companies in the United States this quarter. If more public companies announce that they are starting to hold Bitcoin, I wouldn’t be surprised at all.
In the long run, holding Bitcoin is one of the best response strategies under the current market background where a large number of US dollars are over-issued. The trend of over-issuance of the US dollar will not stop in the foreseeable future, and the basic elements of Bitcoin’s rise will continue to exist. For ordinary investors, holding Bitcoin to ensure that their assets are not devalued is the best response strategy.
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.