According to a recent poll done by VanEck’s Director of Digital Assets Strategy – Gabor Gurbacs, about 70% of present bitcoin holders are prepared to undergo a major price fall that drives the currency below $3,000 in value.
Is the HODLers Mentality Valid?
It’s safe to assume that bitcoin’s price has plummeted in the last three months or so. The cryptocurrency was flying high in late Q1 and early Q2 of this year, setting new milestones practically every day. It all came to a head in mid-April, when the asset hit its all-time high price of $65,000.
However, the tides swiftly turned following Elon Musk’s FUD, which was amplified by China. In fact, the Asian Superpower went much further this time, declaring a complete ban on BTC mining.
As a result, bitcoin began to plummet, losing more than half of its USD value in the following three months. This emboldened skeptics, who began forecasting even more apocalypse situations lurking around the corner.
As a result, VanEck’s Gabor Gurbacs has opted to study how holders respond if BTC drops 90% from its current price line to around $3,000.
Although the poll is not yet complete, the replies clearly show that the majority of people will stay strong and cling to their assets.
But, would their grip really be strong?
As of today, a scenario in which BTC loses a zero from its current price tag is improbable. However, the asset has previously seen enormous crashes, so declaring that it is impossible to sink below $3,000 may be premature.
And, to say the least, seeing bitcoin assets go through a 90 percent correction might be tough for any investor, regardless of experience or length of time in the market. Investing is, after all, a psychological and emotional game.
“If you can’t control your emotions, you can’t control your money,” Warren Buffett once stated. So, while it may seem like a no-brainer to press the “yes, I can live through such a crisis” button right now, the circumstance could be drastically different if it happens in real life.
When Bitcoin began to swiftly retrace in May of this year, rumors surfaced claiming that many smaller and newer investors had sold their holdings in a hurry. Some even had to sell at a loss. Imagine what would happen if the cryptocurrency experienced a three-fold worse retracement.
At the same time, this allowed more macro investors to amass large amounts of money. Michael Saylor and his company, MicroStrategy, were among them. Interestingly, he recently emphasized his HODLing strategy for his huge BTC holdings. MicroStrategy’s CEO stated that he will not be forced to sell any of his or his company’s coins, regardless of how low bitcoin’s price falls.