Nowadays, it can seem like everyone has an opinion about the major cryptocurrencies. Bitcoin, (Crypto: BTC)Solana, (Crypto: SOL) And Ethereum (Crypto: ETH). However, like many opinions on the markets and investing in general, there is a lot of noise to ignore, and a few precious gems with practical insight.
Especially if you are not directly involved in the cryptocurrency sector, it can be very difficult to properly orient yourself and focus on the important things. So let’s look at three types of chats that you should ignore instead of engaging as part of your investment process.
When a major global player like a government decides to pull out of cryptocurrency, it makes sense that people pay attention. Such players command a lot of assets and selling those assets at once can obviously have a detrimental effect on the market value of the associated coins.
Take, for example, Germany’s decision to sell $3 billion worth of Bitcoin in June 2024 through an asset seizure. Besides being the talk of the cryptocurrency town square for at least a few weeks, this could also be a concern. At least for a while, it has affected the pricing of the king cryptocurrency. An estimated $6.4 billion in U.S. government sales this year could easily have the same or more damaging impact.
Sale by Whales They aren’t on the same level as other cryptocurrencies like Ethereum, but they still make headlines. Large holders are garnering attention, selling only $33 million in mid-January this year, although the price impact is not as significant as Bitcoin.
Still, these discussions are not worth pursuing. In the long run, it doesn’t matter which players are sold and when. So, as an investor, focus on the long view rather than what a few big investors are doing.
The decentralized nature of blockchain networks, as realized by Bitcoin, Ethereum, and Solana, can make it possible if the network’s validators disagree about some of the basic features of their protocols. Fork the chain And start a new project.
Such forks have happened several times in the past for both Ethereum and Bitcoin. You may have heard of these fork versions at the time, and you may even own a few of the fork coins.
But if you’re a typical investor holding these cryptocurrencies indirectly, through your financial institution or an exchange-traded fund (ETF), there’s no need for much casual discussion on the possibility of new forks. It’s not something in your control, and there’s a lot more talk about forks than actual forks — not to mention the rarity of forks that last longer than the original.
Just like stocks, chasing the urge to learn more about the price changes of your favorite cryptocurrency investments is always a challenge. The experience of gathering information about what is happening with prices just now They tend to get addicted because of the financial implications of the data they get. After all, prices change daily, and you want to be an informed investor to avoid losses.
The best way to do this is by looking at the price chart for a minute or two; To help focus on the long-term performance of an investment, I suggest that the chart define a period of at least one year.
If you’re spending more than a few minutes poring over charts, you run the risk of overtrading because all the short-term price data and chatter is noise. The longer you look at your time horizon, the more likely you are to decide on the importance of random fluctuations that have little to do with investment theory to hold a particular coin.
So don’t do it. Commit to holding your cryptocurrency investment for at least two years, and check the value of your coins once a week to start. Remember, looking at the price or reading articles about price action won’t really change it.
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Alex Carchidi It has positions in Bitcoin, Ethereum and Solana. He has a spot in the Motley Fool and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has Disclosure Policy.
