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One day after another, massive liquidations continue on the Bitcoin market. The price of Bitcoin has just plunged to $20K. The price of Bitcoin has not been this cheap since the end of 2020. You read that right, I'm talking about cheap price for Bitcoin. Because in reality, that's how you have to look at it if you understand the why of Bitcoin.

But looking at the Bitcoin Fear & Greed Index, I have confirmation that the majority of participants in this market do not understand the why of Bitcoin:

Not a surprise to me, just a confirmation.

Realize that the fear was less extreme based on the value of the Bitcoin Fear & Greed Index in March 2020 when the price of Bitcoin lost 50% in a few hours from $8K to $3.8K. Was Bitcoin's Black Thursday really any less scary to you than what's happening now?

I'll let you ask yourself that question.

The war in Ukraine is a Black Swan event that changed everything

At the time, many doubted that Bitcoin would be able to beat its 2017 year-end ATH and ever break $20K. Today, you know that Bitcoin will one day be able to see its price exceed $100K. Besides, without this war in Ukraine which is a Black Swan event, who knows if the price of Bitcoin would not already be above its ATH of November 2021.

Because this war in Ukraine has come on top of a situation that was supposed to gradually return to normal with the end of the COVID-19 pandemic. And then, all the plans were turned upside down. Uncertainty has taken over the market because the uncertainty has taken over the world.

No one knows when this war in Ukraine will end. No one can say whether Vladimir Putin will not end up going completely crazy by sending a nuclear bomb (even a tactical one) over Ukraine. I don't believe it, but Russia takes a lot of pleasure in making this threat frequently, which has the effect of driving up the price of oil and gas, but also as other commodities.

And this keeps inflation high. While inflation was 8.6% in May 2022 in America, energy sector inflation was 34.6% year-on-year:

Putin is using this weapon of fear to keep the pressure on the Western world. In the same way, he is threatening the world with a global food crisis by blocking grain exports from Ukraine.

Everyone is feverishly awaiting announcements from the Fed or the ECB on rate hikes and monetary policy changes.

In short, all this makes the next few months more uncertain than ever. Investors hate uncertainty. It leads them to lose their sense of logical reasoning and make decisions based on emotion. This results in poor choices and subsequent money losses.

Bitcoin is still wrongly considered a risk-on asset. To me, it's just the opposite. Bitcoin is a unit of wealth that is not tied to any government or central bank. Bitcoin is a species apart and will act as an insurance policy in case of a major financial catastrophe. That's why legendary investor Bill Miller recently said that 50-60% of his portfolio is in BTC.

This is no coincidence.

While the price of Bitcoin is at $20K, you can't know if the bottom has already been reached. Its price could go lower. If the $20K doesn't hold, then you could see Bitcoin go to $15K, or even worse $10K. You can see why the price of Bitcoin continues to fall as the Bitcoin reserves on the exchanges are low. With low volumes in the spot market, when those who don't understand Bitcoin panic and sell, it has far more violent effects than usual.

Yet, have you ever wondered what happens when you sell Bitcoin on a trading platform?

While some are selling in panic, others are accumulating more and more BTC

If you understand how the Bitcoin market works, you may find my question trivial. Well, especially the answer to that question. But I think it's important to ask it because many people struggle to understand how a free market like Bitcoin works, where trading never stops.

To sell Bitcoin on a trading platform, there has to be someone on the other side who wants to buy your Bitcoin. It's a trade between two parties no matter what. Without a buyer on the other side, you can't sell your Bitcoin.

But all the people who panic manage to sell their Bitcoin directly on the exchange platforms. There is no waiting. Do you know why? Because on the other side there are people who have a long-term view and are ready to take every opportunity to accumulate more BTC at this price level under $30K. They will continue to do so below $20K if it happens.

Just like the Bitcoin HODLers of last resort did in March 2020. When everyone was panicking at the time, I was strengthening my BTC positions. The only number that matters to me is how many BTC I HODL. The US dollar is weak money that I try to get away from as much as possible. So I don't waste my time constantly comparing the value of the BTC I HODL in US dollars.

It would not make sense to me.

The most interesting thing to observe is that those people who buy Bitcoin from those who are panicking will take it straight off the exchanges and put it in cold storage. These people will then remain patient for years and years to benefit fully from the Bitcoin revolution.

In my opinion, it is in your best interest to adopt this strategy which will change your future for the better on all levels. So this is the single question you need to answer as you consider selling your BTC or hesitate to accumulate more:

Why are some people in such a rush to buy my BTC at $20K when I'm about to sell in a panic or hesitate to accumulate more?

When you answer this question, you'll know what to do. It's up to you.

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Some reading

The 7 Stages of a Bear Market – Where Are We With Bitcoin? Probably between panic and accumulation/stabilization.
Elon Musk’s Strategy to Hedge Against Inflation? Own Physical Things Rather Than USD. Always welcome advice as inflation soars in America.
Bear Market Gold Lesson: With Cryptocurrencies, You Must Learn to Separate the Wheat From the Chaff. This is the perfect time to do what should have been done before.
We’re Headed for a Recession — The Atlanta Fed’s GDPNow Indicator Says So. The American economy is contracting at a rapid pace.
The Unfair Advantage You Have Over the Smartest People to Get Rich. There is no need to try to create unique things to become rich. There is a better way.

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Bitcoin Plunges to $20K, Total Panic in the…