What to do if Bitcoin "crashes"?

Recently, doubts about Bitcoin from overseas communities have not only come from the sell-off by Mark Cuban I mentioned in my article yesterday but also from a series of actions by MicroStrategy, Bitcoin's most well-known institutional holder.

Recently, many sharp-eyed people have noticed that MicroStrategy has started selling its Bitcoin holdings.

At this moment, when the crypto ecosystem is filled with doubts, this move by MicroStrategy will undoubtedly trigger strong emotions in the community.

Some believe that MicroStrategy's action is normal because it is a publicly listed company, needing to consider performance, deal with financial issues, consider shareholder interests, and "report" to Wall Street... so it needs some cash.

And the asset with the largest share, the best liquidity, and the ability to be liquidated immediately is Bitcoin.

Therefore, selling part of the holdings to exchange for cash is also very normal.

But more people are worried that MicroStrategy is "not going to make it," that it might trigger a collapse, or even cause the price of Bitcoin to crash.

I used AI to estimate that if MicroStrategy's entire Bitcoin holdings were liquidated and sold off at once, what would happen to Bitcoin's price (as of the time I wrote this article)?

AI provided the following results:

• Ignoring optimistic scenarios;

• Most likely (40% probability), a crash to $64,000;

• Moderately pessimistic (30% probability), a crash to $60,000;

• Worst case (10% probability), a crash to $57,000.

In response, I would be more extreme than AI, further halving the prices AI suggested, resulting in the following estimates:

• Most likely (40% probability), a crash to $32,000;

• Moderately pessimistic (30% probability), a crash to $30,000;

• Worst case (10% probability), a crash to $28,000.

If this more extreme scenario occurs, how to handle it depends on the investor's judgment.

If investors believe that after such a crash Bitcoin is no longer meaningful or valuable, then this crash would be a disaster for them.

If investors believe that such a crash is just a detour on Bitcoin's path forward and does not affect its bright future and prospects, then this crash would be a rare opportunity for them.

In articles from last year and earlier this year, many readers asked me: what is the current dollar-cost averaging (DCA) price for Bitcoin?

My answer is: at this price level, I wouldn't consider DCA.

However, if Bitcoin were to drop again below $35,000 (like in that extreme crash scenario above), then for me, it would be a very rare opportunity.

Because I still believe in Bitcoin's future and prospects.

Therefore, whether MicroStrategy blows up or not doesn't affect my judgment of Bitcoin's future; the only thing that might be affected (when it gets liquidated and causes a price crash) is my own actions.

So, I see the rumors about MicroStrategy in overseas communities as just noise, which can be completely ignored.

In an article from two years ago, I was not very satisfied with the so-called bull market at that time.

Back then, many people were excitedly obsessed with Bitcoin surpassing $100k.

But in my view, its significance was quite limited.

Because without the prosperity of the entire crypto ecosystem, Bitcoin's dominance is not only very limited in meaning but also quite unstable. Only when the entire crypto ecosystem prospers can Bitcoin's value have a more solid foundation and growth potential.

Over the years, under various shocks and disturbances, the crypto ecosystem has indeed faced various problems, leading some people to start questioning Bitcoin even now.

This is very normal.

Because most people are speculators; they cannot see the future and won't bother to think about it.

But I firmly believe: the current sluggishness is just a cyclical low point of the ecosystem. Bright days will come, and the future remains bright—only we need more patience and more waiting.

Time will not let down those who are dedicated.