9 Lessons Bitcoin Will Have Taught Us in 2021

#4: Boom/Bust cycles seem to be over in the Bitcoin world.

Illustration by Sylvain Saurel

The year 2021 will have been a particularly exciting one in the Bitcoin world. It was this year that one country, El Salvador, adopted Bitcoin as a legal tender for the first time. Twelve and a half years after the launch of the Bitcoin network on January 3, 2009, by Satoshi Nakamoto, Bitcoin took another crucial step.

The hyperbitcoinization of the world goes through these steps. Of course, the powerful people in the current system immediately criticized the initiative of President Nayib Bukele. The fear of the IMF or the World Bank is clear: that Bitcoin will make them obsolete.

We will see if this happens in the future as more countries adopt Bitcoin as their legal tender. For other countries will follow the path laid out by Nayib Bukele. It is only a matter of time. All the small countries left behind by the current monetary and financial system have a huge interest in seizing the Bitcoin opportunity to try to change the course of their destiny.

The adoption of Bitcoin by countries will still be a strong trend to observe in 2022.

Apart from that, 2021 will have brought us its share of lessons as always. Some of these lessons were already known, but I thought it was important to make a small assessment for the newcomers. Please feel free to comment and tell me what you’ve learned about the Bitcoin world in 2021.

Don’t blindly listen to influencers

No one can predict the price of Bitcoin 100%. Anyone who tells you otherwise is simply lying. That’s why I take precautions every time I give you my predictions about the price of Bitcoin in the short or medium term.

My predictions are only an expression of my opinion. An opinion based on data that I have analyzed. But again, there can be a significant cognitive bias. I try to be careful not to fall into confirmation bias, but I’m not perfect, far from it.

So you need to be wary of influencer predictions. Promises are only binding on those who believe them. Consider these predictions as opinions that you will include in your thought process. Then, it will be up to you, and only you, to synthesize them to make the best decision on what you want to do.

Because at the end of the day, it’s always your money. Not the influencers’.

Don’t try to time the market

In the world of traditional finance, the following adage is often repeated:

“Time in the market always beat timing the market.”

This is also true with Bitcoin. It is even more true with a NgU technology like Bitcoin in my opinion. Your biggest natural advantage with Bitcoin is the time you are willing to HODL Bitcoin.

The key is to develop your knowledge about Bitcoin, the economy, and money so that you reach the level of confidence that will allow you to become a HODLer no matter what. Then you can take advantage of your greatest strength in the Bitcoin world. When others panic, you will remain calm and confident in your convictions.

Then you can apply the best strategy there is with Bitcoin: Buy, HODL, Repeat. Simple and effective.

HODL no matter what is the best strategy with Bitcoin

The amount of time you are willing to spend in the Bitcoin market is your biggest natural advantage. This will protect you from short-term price manipulation by the Whales or large institutional investors as we saw on the night of December 3 to 4, 2021 with the leverage flush that caused the Bitcoin price to drop from $56K to $42K in a matter of hours.

With long-term goals, you will be able to protect yourself from this volatility of the Bitcoin price. You will even make it your best ally.

Recently, I saw an interesting piece of data that confirms this. No BTC owner who has HODL for more than 3 years has lost money. This should lead you to understand that HODL Bitcoin is an excellent strategy. Even better is the fact that it requires no special skills, just confidence, which then leads to patience.

It’s up to you to develop that confidence in Bitcoin.

Boom/Bust cycles seem to be over in the Bitcoin world

Since Bitcoin’s inception, we have become accustomed to 4-year market cycles that were interspersed with a Bitcoin Halving each time. Globally, a Bull Market would start 6 months after the Halving and last 18 months. Then we would have a Bear Market more or less prolonged until the next Halving.

These Boom/Bust cycles seem to be over in the Bitcoin world. The predictive models seem to need to be updated with the current cycle whose Bull Market seems to me to extend over Q1 2022 or even Q2 2022.

Bitcoin is a young asset. So it makes sense that the arrival of new types of investors has changed the game. Institutional investors have a longer-term view than retail investors for example. Besides, the fact that Bitcoin’s adoption is becoming continuous in a context of high inflation also changes the codes. Finally, since everyone has been aware of the market cycles of Bitcoin since its inception, things may change.

We will see if this is confirmed in the coming months.

You don’t have to be ashamed to take profits at some point

I am a Bitcoiner, and my strategy with Bitcoin is long-term. When asked when I plan to sell my Bitcoin, I say this: Bitcoin HODLer one day, Bitcoin HODLer forever. So I don’t set limits on how long I can HODL Bitcoin no matter what.

Taking profits too prematurely is one of the worst pieces of advice given in the Bitcoin world in my opinion.

However, we are all different. We all have different goals and different profiles. So if someone thinks that taking profits with their Bitcoin at some point is the best choice for their profile, then they have no shame in doing so.

As I keep telling you, it’s your money at stake. I’m giving you my opinion, but I understand that your goals may be different. Whatever happens, make the best decision for your interests.

Zoom Out, DCA, Ignore the FUD. Enjoy the ride

Once you understand the why of Bitcoin, you’ll understand that the goals of the Bitcoin revolution are long-term. Bitcoin mass adoption will be in 3 phases:

  • Store of value
  • Widespread means of payment
  • Unit of account

These phases will take time, and even though everything is moving very fast with Bitcoin, you’ll have to learn to be patient. When you have reached the right level of confidence, you will take a step back. Then you’ll see that Bitcoin is an accumulation game for years to come. To make the most of it, the following pattern is ideal: Zoom Out, DCA, Ignore the FUD.

Then you can enjoy your adventure in this revolutionary world.

Not your keys, Not your Bitcoin

The golden rule of Bitcoin that needs to be repeated over and over again: Not your Keys, Not your Bitcoin. Every year, people lose Bitcoin for not making the security of their Bitcoin a priority. This is sad because keeping your Bitcoin secure is not that complex.

It’s a necessity to truly access the liberating power of Bitcoin. The first thing you need to do, if you haven’t already done so, is to get your Bitcoin off the exchange platforms. That way, you won’t be letting a third party secure your Bitcoin.

You will have complete control over the fruits of your labor and can live your life on your own terms.

Bitcoin is the Next Bitcoin

After four years without any major evolution, the Bitcoin protocol has seen a Bitcoin evolution in late 2021 with the activation of the Taproot upgrade. Taproot should be seen as a foundation for the next big innovations that will be built on top of the Bitcoin Blockchain.

Contrary to what some would have you believe, Bitcoin technology is not outdated. It is perfect for giving credibility to Bitcoin’s unique monetary attributes.

There is no need to waste your time looking for the next Bitcoin, just as there is no need to waste your time looking for the next Internet. Bitcoin is the Next Bitcoin. Period.

Time is the scarcest resource on earth. Bitcoin helps you make the most of your time

Looking for something rarer than Bitcoin? Well, it exists. It’s about the time you have on Earth. There is nothing more precious than the time you will live. To make the most of your time, you must be able to live your life on your own terms.

This is where Bitcoin should be seen as your best ally. By achieving true financial freedom with Bitcoin, you will be able to focus on living your life to the fullest.

Final Thoughts

Bitcoin is an incredible monetary revolution that changes your worldview in many ways. Bitcoin pushes you to constantly expand your knowledge on a whole host of subjects that you were not interested in before. Bitcoin makes you want to fully access the power of knowledge to change your life for the better.

Here I have delivered some of the fundamental lessons that Bitcoin will have taught us by 2021. Many of these lessons have already been highlighted in past years, but since new people are constantly coming into the Bitcoin world, it’s always interesting to dwell on them from time to time.

What are some of the biggest lessons you’re taking away from your Bitcoin journey in 2021 (and even before)?

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