The recent selloff in cryptocurrencies has been surprising and powerful, Bitcoin has lost more than 70% of its value since its highs in November, and Celsius - a lending platform - announced that it will temporarily stop a large part of its activity, and it appears That broader market volatility will continue.
Although the volatile environment is far from over, there are lessons to be learned from what we have seen so far.
And the American “Forbes” website published an article written by Ilona Limonta Volkova, in which she said that recognizing patterns is a powerful tool in financial analysis, yet even the most skilled investors fall into the trap of firm or repetitive thinking that “this time it will be as it was.” From before".
Although it is logically understood that there is no recession like the one that preceded it, the vast majority of passive planning is based on the 2008 global financial crisis.
Past performance is not indicative of future results
What will happen if the next recession continues twice?
She said that it is impossible to predict whether the next deflation will have the same magnitude and characteristics as the length of time, and that a drop in cryptocurrency prices is by no means inevitable, however it is wise to recall that one should not rely on yesterday's results.
Don't give up on health doubts
The writer noted that she attended the Wharton School at the University of Pennsylvania, has an MBA, and that her day job is in financial services, and has all the qualifications that enable her to understand cryptocurrency and decentralized finance, however she admitted that she often faces difficulties in contextualizing and understanding The intricacies of the cryptocurrency world are truly complex, and she stated that in conversations with experts in the digital trading market she suddenly finds herself ignorant to those who are more knowledgeable than her.
The writer added that there must be what is known as a healthy skepticism, and a reminder of the importance of forming a logical contrary view.
It might be a good idea to just watch
The fintech landscape is rapidly evolving, with products, tariffs, and metrics constantly evolving, and it's perfectly reasonable to be an observer, rather than an active participant, and you don't have to form an opinion immediately, or in fact at all, and you can take your time to learn, ask questions, and reach out. to your own conclusions.
What comes next?
According to the writer, this is likely to be the tip of the iceberg for the decline in cryptocurrency prices, as last week Coinbase announced that it would reduce its workforce by 18%.
As volatility continues to creep into the broader market, each of us must ask ourselves some tough questions, and begin preparing to come to terms with the new reality.