Watching the value of your investments decline is one of life's most unpleasant experiences. The best investors of our time look to history and take a long-term investment perspective. Looking to the past can help you create an investment framework that not only gives you peace of mind but also makes you confident about investing during market downturns. 

“You make most of your money in a bear market. You just don’t realise it at the time”. - Shelby Davis

Since the beginning, Bitcoin has seen multiple corrections; it’s a function of an immature market and a natural occurrence as they fight for mass adoption. 

The performance of cryptocurrencies this year has led many to question at what point this will end. This year alone, we’ve seen 26 cases where the term “Bitcoin is dead” has been used.

This is not the first time we have been here. Since 2013, we have seen five significant corrections in the Bitcoin price: July 2013, January 2015, November 2018, March 2020 and November 2021. It becomes clear that after every significant correction, Bitcoin, along with the rest of the cryptocurrency market, has always risen from its ashes, and not only does it rise, but it comes back to set new all-time highs.

It becomes clear from this historical data that opportunities can emerge during times of fear.

On average, Bitcoin fell over 79%, but still managed to recover more than +3,887% over its four biggest corrections. This means if you had invested R1 000 prior to a major pullback and you didn’t sell it, you would have R8 380 on average by the time it reached its next high. If you bought in at the bottom of the pullback, you would have made R38 870 on average. These are substantial returns for an asset that was pronounced  ‘Dead’ over a couple of hundred headlines. 

The point is, as far as crypto volatility goes, what we are experiencing now has happened before, and this is by no means uncharted waters. Looking at the Bitcoin price chart from a broader perspective will help us better understand where things stand.

Above is the Bitcoin Rainbow Chart, which overlays the Bitcoin price with colour bands to show market sentiment at each colour stage. Investors use this as a gauge for potential opportunities to buy or sell.

Looking at the current price of Bitcoin in the chart, you’ll notice that Bitcoin is currently in the “Fire Sale!” zone, historically proven to be an exceptionally profitable investment area. 

In situations where you do not zoom out, you often view events in isolation and forget what has previously happened.

Fundamentally, Bitcoin is as secure as ever, and one can expect continued growth and adoption in the years to come. It is almost impossible to predict when the market will bottom - therefore - it is better to position yourself in advance to reap the benefits of improving conditions fully. 

With the above in mind, you can utilise these points to navigate these uncertain times and achieve long-term benefits.

1. Mind over emotions

Emotions play a major role in your investing success. Looking past your emotions and the surrounding media noise is the mark of any great trader and investor. Even though it seems counterintuitive and irrational, most great opportunities have come during turbulent and uncertain times.

2. Keep it simple – Dollar Cost Average

The most effective technique for investing in a downward-trending market is Dollar Cost Average (DCA). It is the discipline of investing a set amount each week on the same day, regardless of price. DCA has two primary benefits: it reduces the overall impact of price volatility and may lower the average cost. Additionally, it aims to prevent poorly timed lump sum investments at higher prices.

3. Stick to your plan

Start by deciding how much you want to invest over the next 12 months. Then, if you would like to split this across weeks, bi-weekly or monthly, choose a day to invest that money regularly (a DCA day). All that’s left to do is stick to your plan and watch your investment value grow. What happens after 12 months? Start again, adjust your budget and keep on building your financial freedom.

4. Diversification

Investing is one of the best ways to build wealth and reach your long-term financial goals. However, selecting the right investment to achieve your goals can be challenging. By diversifying your investments, you can avoid risking everything on one single asset and instead spread your investments across several assets or asset classes.

Where can I gain access to Bitcoin and the cryptocurrency market at large?

At Altify, you can seamlessly gain investment exposure to Bitcoin as a standalone cryptocurrency as well as a part of the Altify Top 10 Bundle and Payments Bundle. 

Start your financial journey in seconds by clicking here and enjoy our easy sign-up process and low minimum investments.