Panic Selling

Bitcoin drops. Sometimes a lot. 30%, 50%, even 80% from peak prices in the major bear markets.

When that happens, a predictable pattern plays out. Headlines turn negative. Social media fills with doom. People who were excited six months ago are suddenly convinced Bitcoin is dead — again. Many sell.

And then, usually, it recovers. And those who sold watch from the sidelines as it climbs back.

This pattern has repeated in every major Bitcoin cycle. 2011, 2013, 2017, 2018, 2022 — each crash brought predictions of permanent death. Each was followed by a recovery that exceeded the previous high.

None of that guarantees the future. Bitcoin could fail. Past performance doesn’t predict what comes next.

But here’s what the data does show: the people who fared worst in Bitcoin’s history were not the ones who bought at the wrong time. They were the ones who bought, panicked during a drop, sold at a loss, and either stayed out or bought back higher. They got hit twice — once on the way down, once watching the recovery from outside.

The people who fared best tended to have a simple approach: they understood why they held it, had only put in what they could afford to sit on for years, and largely ignored short-term price movements.

Not a strategy anyone can prescribe. Just an observation about what the history looks like.

Tomorrow: losing your seed phrase — the irreversible mistake.

— The Daily Bit