Cryptocurrency Market Risk is not Volatility

"Risk comes from not knowing what you're doing." -Warren Buffett

There is a difference between the massive volaitility, risk and loss in the market that is often generalized. We saw Bitcoin lose 90% of its value in 2018, and another 80% loss of value between 2013-2015. This is a paper loss that is only realized or crystalized when the asset is sold. Warren buffett, the World's most recognized investor has roundly denounced Bitcoin, but his quote above is a good assessment of how to approach this highly volatile asset.

Volatility is a measure of price variability around the mean. A highly volatile asset produces opportunity when its price is low for trading. Bitcoin is a cyclical currency, with regular dips in Q4 and rises during the Spring. November has been Bitcoin's best month historically.

Risk is chance of loss. It is looking at an asset and assessing what the chance of total loss. Bitcoin is not going to vanish, and has a dominace in the Cryptocurrency Market that drives their prices. Many altcoins will likely vanish, and you are at risk of capital loss if you invest in them.

When we look at Bitcoin at today's lows between $3,500 and $4,100 we are presented with an opportunity. Bitcoin is an alternative asset that may perform well in crisis, and has been leaned on during periods of hyperinflation, as in Venezuela. We need to look at Bitcoin as a value investment and acceot ongoing volaitlity. The volatility is here, but the risk is low. Only invest what you can lose, as I am not a financial professional.

Originally published in my Bearshares account I own at:
https://bearshares.com/bitcoin/@wstanley226/cryptocurrency-market-risk-is-not-volatility

Also published in my Whaleshares, Golos, Serey and Weku accounts I own.

Picture from Pixabay.