One of the coolest things about Crypto Currencies is that they trade 24/7, every day. There is no rest. It trades after business hours, online, with easy to use apps, in every country, every time zone, all the time, all around the world.

We’ve recently seen a major price correction – Crash? – in BTC and ETH. Preceding this crash were some quasi parabolic price moves to the upside.

Here is the 1 year chart for BTC

And here is the 1 year chart for ETH

BTC and ETC are both off from their highs in similar % amounts (but still up amazingly over the past 12 months). BTC has been trading sideways since March, and has broken down well through its 100 day MA, and it is clearly in a more bearish phase than ETH at this point.

ETH has blown the top off its recent peak; But is finding resistance at its 100 day MA and attempting to fight its way back into its established ascending channel.

So. What the heck does that mean? It is called normal volatility for emerging technologies as they undergo price discovery. Investors and speculators of all sorts have begun moving into these space. Institutions, hedge funds, asset managers, governments, businesses have all started to figure this out. And it will continue to be a very rocky ride.

If you want to have some fun look at some charts of Google, Apple, Amazon – Heck, any novel tech company in the first 1/4 of their existence. The volatility of their stocks is astounding. Oftentimes still is. Imagine owning Amazon in 2004 and watching it decline 50% over 18 months to a price of $31. Or Oct 07 to Nov 08 when it declined by almost 60%. Or the period of 03 to 06 when it declined 55%. I could go on and on and on. Amazon is currently worth $3250. Get the picture?

Now I’m not saying BTC or ETH or any cyrpto currency or company is going to be the next amazon. However, there are lessons to be learned from thier examples – If you are a longer term believer in the space.

Remember, volatility and the uncertainty are the costs of earning a high rate of return.

I suggest if you find yourself being freaked out by crypto volatility, you should think about a few things

1. Do you have the mental fortitude to survive it? Don’t put yourself in a position where you will make poor decisions under stress. Stress (aka fear and greed) is the enemy of smart decision making.
2. Do you have a strategy – even if it is as simple as Hodling? A strategy that you believe in will keep you on track even in rough times.
3. Do you have the psychological tool kit to manage it? Are you a strategic investor or an opportunistic one? Do you understand your emotions and how they impact your decision making? Do you have guiding principals that can help you navigate the extreme noise that are part of this asset class?

So, those are three things to think about: Your Fortitude, your Strategy, and your Psychology. Understand what you’re working with and act accordingly!