Warren Buffet’s most famous words of advice are to “be fearful when others are greedy, and greedy when others are fearful.” He made billions from the idea, buying low-priced stocks when other investors had lost faith, and selling them during bull markets when greed and euphoria had set in.
Modern investors have distilled this message into an even simpler phrase: “Buy the fear, sell the greed.” Bitcoin and the rest of the cryptocurrency market has seen a massive drop in value over the past few months—to some, this is a cause of concern. To many others, this is a golden opportunity to purchase bitcoin at what they see as a discounted rate.
Mere months ago, traders were happy to pay nearly $70,000 for a single bitcoin. Now, as the price sits at nearly half that, there is a strong sense of fear in the air. But rather than succumbing to that fear and selling for a loss, many investors are choosing to “buy the fear” and pick up more crypto at a discount.
In both the stock and cryptocurrency markets, we have seen time and time again that the fear can fade and the value of the assets can make massive rebounds. When the crypto market inevitably rebounds—whether that be in two weeks or two years—the investors who chose to “buy the fear” will be able to reap their rewards and “sell the greed” that comes with a bull market.
