Thread by @OhHaiAndy

Bitcoin CRASHED from $50k to $30k last week thanks to Elon Musk and China.

What happened? Should you be scared? What should you do next?

// THREAD //

If you look at the charts on Coinbase for last week, you'll see that Bitcoin dropped all the way down to $30,000 on May 19.

Ethereum dropped to $1,860

And even the mighty $DOGE dropped to $0.22

Crypto is down across the board. WHY?

Basically, two main events happened last week:

1) Elon tweeted that Tesla would no longer be accepting BTC as payment for their cars because of environmental concerns

2) China has yet again banned financial/payment institutions from providing services related to crypto

Some background:

At the end of 2020, Bitcoin started moving. Big time.

Bitcoin went from $10k in Oct to nearly $30K by December of 2020.

Then in 2021, a series of events happened that led to even more price movement.

People started buying more Bitcoin because of increased institutional interest.

The biggest story was that Telsa purchased $1.5 Billion worth of Bitcoin in February.

Tesla also announced they would start accepting Bitcoin as payment for their cars.

More tech companies piled on board, and that, plus news of more stimulus money, caused more retail investors to jump in.

All this led to Bitcoin hitting a new all-time high of nearly $64,000.

After hitting its new all-time high some of the excitement of all the news started to wear off.

People started taking some profits and eventually, Bitcoin had a nice little correction to $48K and then moved sideways into the $50k range.

That was until Papa Elon tweeted.

Elon tweeted that Tesla would no longer accept BTC for their cars based on environmental concerns. People started speculating that Tesla might sell BTC too (they didn't).

Then China announced they were banning financial and payment institutions from offering crypto services.

So what now? Where does this leave us and what does this mean?

As of right now, Bitcoin is $38,000.

Will it continue to plummet? Will it skyrocket again?

Can it fall lower? Sure. It's crypto. It's crazy. Anything can happen.

But do I think Bitcoin is done for this cycle? No way. I still see so many signs that make me believe we will hit news highs this year still.

But that's unimportant.

I believe if we zoom out, even $64K BTC will look like a bargain.

The fundamentals have not changed and Elon & China can only drop the price short-term.

China has "banned" Bitcoin many times before & many big names have been negative towards it.

It's still alive.

Also, I am suspicious of the incentives Elon/Tesla have with their announcement.

It's pretty easy to research that the majority of Bitcoin energy usage is from renewables.

Bitcoin is capitalist by nature, so miners seek out the cheapest electricity sources.

Basically, I think if this news and this price movement made you panic, then:

1) You might have too much exposure to crypto.

2) You probably aren't educated enough in the space yet.

3) You need more time in the market.

With all types of investing. You need time in the market (years, not months).

Time in the market lets you experience all these ups and downs.

It helps prepare you for future moves. It makes you more comfortable.

Educating yourself on what you are investing in is CRUCIAL.

So much panic and emotion are simply because people invest in whatever a Twitter or Youtube person tell them to invest in.

You should only invest in things you actually understand.

You are also probably panicking because you have too much exposure to crypto.

If big price swings and changes to your net worth scare you, you are almost certainly over-exposed.

You were told it would make you rich, so you went YOLO, but you need to be smart.

I am still extremely bullish on #Bitcoin for the long term. I am still bullish short-term too, but I think if we zoom out, this stuff doesn't matter.

The fundamentals of Bitcoin will make it one of the single more desirable assets in the future IMO.

So what did I do during this "flash crash?" I did what I do all the time. I bought more #Bitcoin.

Should you keep buying? Sure... if you understand what you are buying and have the right mindset/approach.

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