Ethereum (ETH) was the subject of some major FUD yesterday. It all revolved around some news that U.S regulators were about to declare Ethereum a security. The whole circus started on the 1st of May, when the Wall Street Journal first broke the news. What made this FUD sound convincing is that, information was flying all over, with claims that the decision was being made in a closed door meeting. Naturally, investors took cover in a bid to protect their investments, just in case Ethereum went south. Now that the whole thing has come out as FUD, Ethereum has recovered some of the losses. But there are lessons that investors can take from this whole thing, and equip themselves for the future.
One of the lessons that an investor can take from this whole fiasco is the importance of investing for the long haul. Crypto is still young, and in its growth process, it will face lots of challenges. There are lots of industries out there that feel threatened by crypto, and would do anything it takes to bring it down. As such, negative news whether true or not, will be a part of this market for some time. This means short-term volatility is, and will continue to be the norm. In essence, the best way to approach this market is to put your money in good projects, and do it with a long-term view. You must believe in the projects that you invest in.
Otherwise, you will always be scared by market noise and that will negatively impact your portfolio in the long-run. For instance, for someone invested in Ethereum (ETH) for the long haul, yesterday’s FUD would not have affected them. That’s because good analysis can tell you that Ethereum like all other cryptos is a global thing. As such, even if the U.S were to declare it a security, the impact would be short-lived, in the grand scheme of things. Besides, the future of crypto trading is shifting towards decentralized exchanges meaning trading volumes will continue to grow, with or without regulations.
Another lesson one can take from this whole thing is that investors are increasingly becoming immune to negative news. In the past, any negative news would send the market tumbling, leading to massive losses. However, during yesterday’s large-scale FUD, Ethereum and the rest of the market only experienced slight dips in value. A $20 billion drop in market cap is a normal market correction in crypto. Ethereum (ETH) held strong above $700, and has recovered most of these losses. This is an indicator that crypto is going mainstream, and investors now believe in it more and more. People are beginning to appreciate the fact that blockchain technology is here to stay, based on the daily stories of adoption coming out from all across the world.
This is a great because in the long-run it will make FUD irrelevant. Things will get to a point where no one longer cares about the negativity!