China Crypto Ban

If you're wondering why your whole cryptocurrency portfolio is down going into the weekend, I'll explain it in one word. China. To top it off, low liquidity in the crypto markets makes the price swing harder. Cryptocurrency has seen many ups and downs through the years due to China's policies. The markets will adjust, and we can move forward into the future without the constant Chinese FUD.

As you may have seen already, China banned all crypto purchases. In the past, the Chinese were still able to purchase cryptocurrency OTC (over the counter). They weren't able to purchase crypto directly from their bank accounts.

Earlier in the year, China banned the ability of its citizens to mine cryptocurrency, which created a lot of FUD (fear uncertainty doubt). The market had a big dip back then, just like we are seeing a substantial drop today.

Now we are too early to guess how this will ultimately affect the market going into the future. What we can say is that we currently see a dip that we can buy. This is a great way to benefit from news like this is to learn to buy crypto on a dip.

Buy The Dip

The one positive thing I've experienced through all the dips from Chinese crypto news is that I've been able to buy wild dips in the past. I DCA (dollar cost average) into my crypto holdings, and so I've naturally bought every dip going back since 2017. Learn to buy crypto on the dip, if you are using the DCA method of investing into crypto you will buy every dip. It seems like there is a dip every week. But there is still a very strong uptrend.

I've attempted to time the markets with cryptocurrency. My trades never went as well as my dollar-cost averaging, period. The crypto markets are so dang wild that nobody can accurately time the market every time. There are even multiple studies about how using the dollar cost average technique is more effective than timing the market.

There is also a lot of fear in the markets lately with all the news surrounding cryptocurrency. This has made there be lower liquidity in the market. Low liquidity leads to the price to be more easily manipulated more by the news.

If someone bought $10 million worth of Bitcoin the price would swing higher than if there were higher liquidity in the market. On the flip side, if someone sold $10 million worth of the price is going to drop more violently.

The Good Crypto News

Personally, I'm happy that the China FUD has reached the end of its reign of terror. This is wonderful crypto news in the end, as we won't see a world power manipulating cryptocurrency. This is the purpose of cryptocurrency, right? after all, the main reason for crypto's creation was to fix the many problems of traditional currencies. The most significant benefit of cryptocurrency is to take power and responsibility into the hands of the holders.

Obviously, I'd prefer that our fellow brothers and sisters in China have the ability to trade crypto; sadly, that isn't in our hands to change. Optimally they'd be trading with us side by side and creating a more decentralized currency.

Let's let the China FUD be behind us and look towards a bright future. The best way to move forward is to buy the dip and have confidence in crypto's purpose. One of my own personal regrets is that I didn't see the vision of cryptocurrency earlier. Let's take the power back and run with this news that can be considered good. Much less FUD will be coming out of China. 

Conclusion

Dollar cost averaging in will set you up to buy crytpo dips in the market. Learning how to invest into crypto using these techniques will set you up for success. Look past the FUD that is going on and see the potential and purpose for crypto. This will allow you to have diamond hands and make better more informed decisions with your investment in crypto. The great part is that this same news would have crippled the cryptocurrency market 5 years ago and now it seems to be a drop in the bucket and we will likely see a nice bounce back on the next bit of good news. This type of market behavior is now expected.

Disclaimer: The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.