Hello. This is Oing.
The atmosphere in the crypto market has been unusual lately. Specifically, the sharp decline in the price of Bitcoin, the market leader, has caused great anxiety among many investors. News headlines are filled with fear, and we hear “It’s over now” and “It was just a bubble” everywhere. However, I believe that in times like this, we must face reality and analyze this phenomenon coolly within the larger framework of capitalism.
The Bitcoin crash. This is not just a technical adjustment or a short-term negative event. If you want to grow into an economic entity, you must be able to read the true nature of capital logic and human psychology in this bear market.
The Real Reasons Beneath the Surface of the Bitcoin Price Crash
There can be dozens of superficial reasons why the price of Bitcoin is falling. But the core is always ‘interest rates’ and ‘liquidity’.
1. Macroeconomic Environment: The Era of Liquidity Withdrawal and Tightening
Bitcoin grew explosively in the huge liquidity party fueled by low interest rates and quantitative easing after 2020. With money overflowing, it flowed into riskier assets. But what about now? Central banks worldwide are sharply raising interest rates to control inflation. When interest rates rise, the money in the market is absorbed by banks or safe assets (like bonds).
Investors begin to pay off debt or move money to places that offer higher interest. The first assets to be sold are those considered highly volatile and risky. It is an extremely capitalistic phenomenon that Bitcoin is at the forefront of this. When liquidity dries up, not all assets can rise. This is the first reason for the decline we must understand.
2. Regulatory Risk and Market Uncertainty
The crypto market is still in a regulatory blind spot. Governments in various countries are deliberating on how to handle cryptocurrencies, sometimes announcing strong regulatory proposals. As the bankruptcy or opaque operation of some crypto companies has recently been exposed, calls for investor protection have grown louder.
The market hates uncertainty the most. The fear that regulation will be tightened, or the anxiety that trading might be banned in some countries, rapidly chills investor sentiment. The instinctive fear of ‘What if I can’t get my money back?’ leads to selling pressure.
3. The Chain Reaction of ‘Debt Investment’ Liquidation
In the last bull market, many retail investors and institutions invested using leverage (debt). Many investments were structured to face forced liquidation even with a slight price drop. When the price starts to fall, the positions of investors who lack collateral are automatically dumped onto the market (liquidation), further accelerating the decline. It’s like a domino effect: once it starts to collapse, it spreads uncontrollably.
If any of you are planning reckless debt investment, thinking ‘now is the time,’ you must put the brakes on. Capitalism is cold. Remember that leverage is a double-edged sword, and in a bear market, it can be the noose that tightens around your neck first.
How to See ‘Opportunity’ to Grow as an Economic Entity in a Crash
Most people cheer when prices rise and despair when they fall. But those who truly dream of economic freedom read new opportunities in this crash.
1. Reaffirming the Essence of Investment: Focus on ‘Value’
A crash is a time to separate the wheat from the chaff. Coins with weak fundamentals or those created only due to a trend will disappear during this period. However, assets with strong technological superiority and philosophical value, like Bitcoin, will ultimately survive.
What we need to do now is not get swept up by others’ selling and panic sell, but to reconfirm the ‘intrinsic value of the asset I invested in’. Are the problems Bitcoin seeks to solve (decentralization, freedom of money, etc.) still valid? If so, from a long-term perspective, the current decline turns into an ‘opportunity to buy cheap.’
2. A Time to Check Your Long-Term ‘Attitude’
Investing is not just the act of growing money. It is a journey to understand the capitalist system and secure control over your life. A crash tests your patience, conviction, and attitude toward risk tolerance.
If you are wavering, it might be a sign that you haven’t studied the asset enough or that you invested more than you can afford to lose. Use this opportunity to reset your own investment principles and weightings. You must stick to the principle of only investing ‘money you can afford to lose’ to avoid being easily overwhelmed by market fear.
3. The Importance of Securing Cash and Execution
In a bear market, cash (in USD or KRW) is a weapon. Only those with cash can seize the next opportunity when the market is sufficiently fearful and prices are judged to be bottoming out.
I’m not saying you should sell everything and leave right now. Instead, you should focus more on your main job and cultivate the execution ability to secure ‘seed money’. Whether Bitcoin reaches 100 million or 10 million, what ultimately fills your wallet is your cash flow through labor and business. Instead of despairing over the crash, take action to build your economic muscle.
Future Outlook for Bitcoin: The Strategy of the Survivors
We cannot definitively predict the future of Bitcoin, but the crypto market will not easily disappear, just as it hasn’t before. The movement toward inclusion in the global financial infrastructure continues, and technological innovation will not stop.
What is important is the attitude we adopt.
- Diversification: Putting all your eggs in one basket is speculation, not investment. Diversify your assets with cash, dollars, stocks, real estate, and crypto to hedge risks.
- Consistent Accumulation (DCA): Do not try to guess where the market bottom is. The Dollar-Cost-Averaging (DCA) strategy, consistently buying a fixed amount every month or week, is the wisest way to maintain your mental fortitude even in a crash.
- Knowledge Investment: Instead of just staring at the price chart, study how Bitcoin works, the underlying blockchain technology, and macroeconomic indicators. Only knowledge will build your conviction and give you the strength to overcome fear.
The Bitcoin crash is like a harsh homework assignment given to you by capitalism. Only those who pass this test will gain the right to seize true wealth in the next bull market. Will you be frustrated and leave, or will you use this opportunity as a springboard to grow firmly into an economic entity? The choice is always yours.
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Oing ponders realistic side hustles and survival strategies in the capitalist system with you.