These days, it can seem like everyone has an opinion about major cryptocurrencies such as Bitcoin:, (CRYPTO: BTC)Solana, (CRYPTO: SOL) and: Ethereum: (CRYPTO: ETH). But, as with most commentary on the markets and investing in general, there’s a lot of noise worth ignoring, and a few valuable nuggets of practical insight.
Especially if you are not a direct participant in the cryptocurrency industry, it can be quite difficult to stay focused and focus on the factors that really matter.
It makes sense for people to pay attention when a major global player like a government decides to exit its cryptocurrency holdings. Such players often hold huge amounts of assets, and it is obvious that selling those assets all at once will have a detrimental effect on the market value of the associated coins. :
For example, Germany’s decision to sell the $3 billion worth of bitcoin it held in June 2024 has been the talk of the town in cryptocurrency for at least a few weeks, and may also have a major impact on the cryptocurrency’s pricing , at least for a while.The prospect of about $6.4 billion in Bitcoin from the US government a sell-off that could happen this year could easily have a similar or even greater damaging effect.
Sell by: points in other cryptocurrencies, such as Ethereum, are rarely on the same scale as those by governments, but they still lead. Individual major holders, who sold just $33 million in mid-January this year, are attracting attention, even if the price impact is not as much. not as significant as with Bitcoin.
Still, these discussions aren’t worth following. In the long run, it doesn’t really matter which players sell or when. :
The distributed nature of blockchain networks, as realized in Bitcoin, Ethereum, and Solana, is that if the validators of the network do not agree on some fundamental features of their protocols, they can: fork chain and start a new project.
Such forks have happened to both Ethereum and Bitcoin many times in the past.You may have heard of these forked versions at the time, and you may even own some of the forked coins.
But if you are an ordinary investor who holds these cryptocurrencies indirectly, through your financial institution or exchange-traded fund (ETF), there is simply no need to entertain much of the casual discussion about the possibility of new forks much talked about than actual forks, let alone the extreme rarity of forks that surpass the original.
As with stocks, it’s always tempting to want to know more about the latest price movement of your favorite cryptocurrency investment right now tend to be addictive because of the financial implications of the data you find. After all, prices change daily and you want to be an informed investor to avoid losses.
The right way to do this is to look at the price chart for a minute or two; I suggest that the chart should depict at least a one-year period to help focus on long-term investment performance.
If you spend more than a few minutes poring over the charts, you are in danger of trading because almost all short-term price data and discussion of it is noise underline the importance of random fluctuations that have little to do with the investment thesis of holding a particular coin.
So don’t do it. Commit to holding your cryptocurrency investment for at least a few years and check the price of your coins once a week. Remember that looking at the price or reading articles about the price action doesn’t really change it.
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Alex Karchidi has positions in Bitcoin, Ethereum and Solana The Motley Fool has positions and recommends Bitcoin, Ethereum and Solana a disclosure policy.
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