Say it again: Boldly buy the dip!

Written by: Raoul Pal, Founder of Real Vision

Translated by: Luffy, Foresight News

The current market is bleak, with no hope in sight; everything seems to have come to an end. You’ve lost your opportunity and messed everything up once again.

Everyone is mired in anger and confusion. Even those who anticipated this downturn, while feeling a slight relief that their predictions came true, can also recognize the heavy toll this market has taken on countless people. At this moment, it feels like the darkest hour.

I have been in the trading market for 38 years, witnessing various crashes and market panics, and each experience feels the same—terrible.

I entered the crypto market in 2013, buying Bitcoin for the first time at $200.

After buying, Bitcoin briefly rose, only to plummet 75%. This was during a bull market, and eventually, the price soared to over 10 times my purchase price. I didn’t sell because it was a long-term investment, and I understood the risks involved.

By 2014, during the bear market, Bitcoin crashed again by 87%.

In the subsequent bull market that lasted until 2017, I experienced three crashes of 35% to 45%, which were extremely brutal. Ultimately, due to the Bitcoin fork dispute, I liquidated my position at around $2000, which was also the early high point of 2013.

At that time, my holdings had increased tenfold from my initial entry price. After I sold, Bitcoin skyrocketed another tenfold by the end of that year—unbelievable! Then, another long and brutal bear market began.

I perfectly avoided that entire bear market and felt quite pleased about it.

Then, during the market crash triggered by the COVID-19 pandemic, I bought Bitcoin again at $6500, which was 3.5 times higher than my liquidation price. What I thought was a "correct choice" turned out to be a costly mistake.

From April to July 2021, Bitcoin fell 50%, and the market sentiment at that time was just as terrible as it is now; the mood on Twitter was dreadful, truly at its worst. However, even then, the level of overselling in the market was far less than today.

By November 2021, the market returned to historical highs: SOL surged 13 times from its low, Ethereum doubled, and Bitcoin reached new highs with a 150% increase.

I experienced all of this firsthand. In this long bull market, I was present for every heart-stopping, gut-wrenching moment.

My initial entry price was $200, and now Bitcoin has reached $65,000. Even though I missed a 3.5 times increase due to poor timing, the final returns are still substantial.

For me, in a long-term bullish asset, the first core lesson is to do nothing. The reason "HODL" (Hold On for Dear Life) has become a classic mantra in the crypto community is not by chance; its power far exceeds the notion of "four-year cycles."

The second lesson is to decisively increase your position during market downturns. Even if your timing isn’t perfect, gradually adding to your position during a weak market can lead to compounded returns in the long run, often outperforming regular dollar-cost averaging.

I can’t always have enough capital to make large purchases during a downturn, but I always buy some because it helps to sharpen my mindset.

During market crashes, people often feel they’ve missed the last opportunity, think the market will never recover, and believe everything will completely collapse, never to rise again. But that is far from the truth.

You might ask yourself two questions: Will tomorrow's world be more digital than today? Will the value of fiat currency be lower than today?

If the answers are both yes, then keep holding on. Boldly buy the dip, allowing the power of time to overcome timing strategies, because the former always wins. Increasing your position during significant downturns can lower your cost basis, leading to a world of difference.

On this investment journey, pressure, fear, and self-doubt are unavoidable costs.

Position management should align with your risk tolerance. There’s no need to be anxious; everyone feels this way: during downturns, you think your position is too heavy; during upswings, you regret your position is too light. What you need to do is learn to adjust these emotions and find a rhythm that suits you.

Another key point is not to blindly follow others' judgments. "DYOR (Do Your Own Research)" is also a golden rule in the crypto community; without independent judgment, you cannot endure these darkest moments.

You must form your own firm beliefs; blindly following others' opinions is like using leverage, which will ultimately lead to total loss.

Remember: When you are busy blaming others, you are essentially blaming yourself.

Indeed, the current market is dark, but the sun will soon shine again, and this crash will ultimately become another scar on your investment journey. The premise is that you haven’t used leverage! Leverage can make you lose your principal entirely, just like losing all your chips in a casino. Never lose your chips.

When will this gloom dissipate? I cannot say, but I believe it resembles the market from April to November 2021: a panic drop within a bull market, and I believe it will end soon. Even if my judgment is wrong, I will not change my strategy; as long as I have cash, I will continue to increase my position.

But for you, the situation may be different. Consider creating a "regret-avoiding investment portfolio": Can you withstand a further 50% drop from the current price? If not, then reduce your position, even if doing so now feels foolish. Having the right mindset is key to surviving the market's winter. My mindset is about how to buy more, while yours may be the exact opposite.

There will always be some timing experts in the market who can accurately call the top and even short the market; such people will always exist in the future. But honestly, you just need to remind yourself that a crash can happen at any time. When it does come, you won’t feel anxious because you anticipated it. Let the crash be part of your investment story, not the whole story.

What am I doing now?

I am starting to buy more digital art (which is also equivalent to increasing my Ethereum holdings) and plan to continue adding to my crypto assets next week, just as I have done every time such a buying opportunity arises.

I bought the dip during the COVID crash, I bought the dip during the 2021 crash, and I did the same in 2022 and 2023; I will continue to buy the dip in 2024 and 2025! This time, I will do it again. Each time, my account gains and losses have set new highs before the market, and this method has proven effective time and again. Say it again: Boldly buy the dip!

Wishing everyone good luck; the investment journey has never been easy.

To hold these assets that can achieve long-term compounded growth, you must accept their high volatility; this is the price we must pay. Learn to embrace the volatility.

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