We examine the 14 stages of emotions that you might experience when entering the wildly volatile crypto market.
The markets are wild — you don’t have to keep reminding us about it.
When you punch your ticket for the rollercoaster ride known as the crypto market, it’s important to keep your emotions in check. What goes up must come down, and what goes low typically finds a higher low. This at least rings true for the stock market, and much of Bitcoin’s young trading life has followed suit.
So where are we now? Is this a “buy the dip” kind of market, or are we going to hurt ourselves “catching a falling knife?” Only time will tell. There’s good news for those of you in it for the long run though: it shouldn’t matter. Let’s take a closer look at the 14 emotions one might encounter while in the cryptocurrency market:
Congratulations! You’ve just purchased your first cryptocurrency. Someone at the water cooler must have been pretty convincing because you almost skipped straight to the “Panic” step when you were presented with two 34-character, alphanumeric hashes representing a public and private key that look like WiFi passwords from hell. But alas, you’ve made it.
At this point, you’re focused on the technology. “Decentralization,” you tell yourself. “This is revolutionary, and the world will be better because of it.” After all, it was the tech that got you to buy in the first place.
You’re typically not one for constantly refreshing websites to watch prices tick up and down, but you just bought this specific coin, and how much fun is it to see green? You begin to research tools to help monitor your crypto portfolio, and websites like coinmarketcap.com become almost too rudimentary to keep proper track of those gains.
Visions of paying off your student loans, or putting a down payment on a house, start to creep into your subconscious. “I’ll be smart with any of the profits I take on this trade,” you tell yourself.
Things are really starting to heat up. 10 percent gains in the morning turn into 15 percent gains by lunch time. You’ve downloaded the Blockfolio, Delta or Bitscreener app for your phone at this point, so you can keep a keen eye on those numbers. You even hope someone over your shoulder steals a glance at your portfolio, practically making you a superhero in their eyes. FOMO or Fear of Missing Out becomes a factor.
“Maybe I should have bought more?” you begin to question yourself. “I wonder if I can somehow trade in those TGI Friday’s gift cards I have sitting around for cash?”
You’ve reached god status. Did your boss just tell you to have that report on his desk by lunch? Tell him to go f*ck himself. Doesn’t he know you’re about to 10x? You hit happy hour after work, more confident than ever before. Women aren’t flocking to you yet because you don’t have any fiat, but that’s their loss. You’ll handle the bar tab.
“Student loans will be easy,” you tell yourself. “The tough decision will be picking which color Ferrari I’ll drive. Maybe red.”
Red? What the hell!? How did we give back 9 percent in two hours? This downturn surely was not in the plans. But can you imagine what would have happened if you sold at the top? If only we all knew the future, then we would constantly sell at the top and buy back at the bottom.
“This is okay,” you calm yourself. “We’re still WAY up overall, and this thing was bound for an adjustment sooner or later.”
The focus of your portfolio has gone from the 24hr change to the difference in price since you first bought in. Your portfolio is still in the green. All that negative press regarding the coin you bought is just FUD, and the only reason things are really down is because Bitcoin had a bad week and Bitcoin drives the whole market. You can’t wait until Bitcoin doesn’t impact the market so much.
“We were way overdue for some red days. I’m still up overall.”
Things have gone from bad to worse. You can’t believe your favorite coin just took a 20 percent loss in the last 24 hours. This must be some sort of market manipulation. Questions begin to seep into the back of your mind. What if you’ve just sunk all your money into a scam? What if somewhere, some guy is riding on a yacht with all your money, laughing in your face as he sails into the horizon with two supermodel girlfriends?
“I can’t believe I got into this sh*t,” you exhale. “What would my portfolio look like if itcontinues to sink like this everyday?”
Any chances to sell your position in the green are quickly evaporating. You are turning into a bag holder. You begin to calculate how much you’ve paid in transaction fees to see if there’s some way to break even. You scour the Internet for signs of bullish news. Random anonymous posters on forums who speculate on the price long term become your only sign of light.
Things are down, and now you’re pissed about it. How could you let this happen? Everything they said about this market was true. You need to get out of these positions now before they drain everything you’ve ever put into them. You’ve considered selling in the past, but now you’re ready to pull the trigger.
“Who sold me on this sh*tcoin?”
SELL, SELL, SELL! You need to wash your hands of this trash coin. The only hope left now is that you can get out of the market with the shirt on your back.
You’ve exited. It turns out cryptocurrency isn’t for you, and it won’t ever be for you. You would have been better off listening to your uncle and maxing out your 401k.
The funny thing about this stage is that it’s often the beginning of real opportunity. Just when everyone starts to feel like this, the bottom has been found.
You find yourself drinking alone at the bar on more than a few occasions. Dreams of your orange Ferrari are far off in the rear view of your 2004 Honda Civic (that’s three months past due for inspection, by the way). The daunting payment schedule for your student loans seems like an insurmountable mountain of debt that will haunt you until your kids are graduating high school, and if the Blockfolio app on your phone hasn’t been deleted, it must be six versions out-of-date.
Yet, it is here where real traders are born. You live and you learn.
The bottom is in. Everyone who could have sold has done so already. There is nowhere to go but up.
You haven’t checked on any of the coins you used to stare at daily in weeks, but something reminds you of the old ticker symbol, and you decide to dust off the old coinmarketcap.com to see how things are looking. And they are looking green!
You begin to remember the technology behind the project that made you optimistic in step one. After all, it was the tech that got you to buy in the first place.
Finally, you’ve come full circle. If you managed to hold through the storm, congratulations. You’re either a seasoned trader, or a sociopath with some strange emotional imbalance.
Now, what do all 14 of these emotions have in common? They’re all stupid! Even seasoned veterans must admit that they can sometimes be overcome with emotions, but the key is to have a long term goal and to stick to your guns. With crypto, it’s not uncommon to see the entire market swing up or down by 10 to 20 percent in a day’s time.
It’s belief in the underlying technology that should lead one into any position. And if that underlying tech hasn’t been completely busted, then there’s no reason to panic out of a position. Just HODL it.