Crypto Market Crash: Is 2022 the Time to Sell?

while the Standard & Poor’s 500 Gaining 6% over the past 3 months, things are not the same in the crypto world. The prices of some of the most famous coins have fallen. The reason is often as obvious as mud – no wonder a volatile asset class that doesn’t have a long history.

Is it time to go ahead and sell your Cryptocurrency collectibles? Keep reading to find the answer to this burning question.

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What leads to defeat?

Many of the best cryptocurrencies, including Bitcoin (CRYPTO: BTC)And Ethereum (CRYPTO: ETH)And Solana, And CardanoIt has decreased a lot in recent months. This coincides with the general decline in high-growth technology stocks, which is mainly a result of the Federal Reserve’s plans to reduce asset purchases and raise interest rates several times this year.

I see the pessimism surrounding the broader crypto market is just a risk-free view of investors. There is a lot of uncertainty out there now. In addition to the Fed’s actions, the increasing prevalence of the Corona virus variant Omicron is on the rise inflationAnd a very tight labor market can scare investors into safer assets. In this scenario, the riskiest assets in investors’ portfolios, most likely cryptocurrencies, were the first to go.

The cryptocurrency market has lost nearly $300 billion in value since Wednesday, January 5th. So, are we witnessing the start of the crypto winter, with no recovery in sight for some time? I don’t know the answer to that. If you’re investing for the long term, it won’t matter.

Should you run to get out?

In the same context as investing in stocks, I don’t see a price drop as a signal to sell. Making your investment decisions based on what others are doing is a wrong approach that can lead to buying at the highs and selling at the lows. This will not result in strong returns in the long run. On the contrary, the ability to withstand throughout the ups and downs is rewarded.

Cryptocurrencies are an emerging and highly volatile asset class. Before buying cryptocurrency In the first place, you must understand and accept this fact. In the past five years, Bitcoin has undergone several corrections of 25% or more, and this is the most developed and most valuable cryptocurrency ever. Ethereum is no different, with three withdrawals of 50% or more during the same time. Even the most volatile stocks usually don’t see their prices fluctuate much.

Therefore, I think it is better not to panic and sell now. Instead, try to maintain your focus for the long term. Cryptocurrencies have great potential to overturn a wide range of industries. Along the way, there will undoubtedly be periods, like now, when they lose their luck. The naysayers will point to the industry’s recent performance as a clear indication that cryptocurrency is overvalued and that it’s just a fad. But no disruptive technology is gaining wide adoption and appeal in a straight line. Smart money knows it follows talent, and talent is increasingly turning to cryptocurrencies.

Keep calm and carry on.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.