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Even for the most contrarian of investors, it’s never nice to see this much blood on the streets. While plenty predicted the kind of levels that bitcoin is now facing, few anticipated the journey. Within one short month, we’ve seen the loss of one of the industry’s biggest projects, while some of the most established names are now beginning to waiver. It is certainly enough to put all but the most battle-hardened investors on high alert.

At times like these, though, it’s very important to look at history. Even in the worst crises, we have known in the modern era: from the Great Depression of 1936 to World War II to nuclear and financial crises of all types, the data always conveys the same message: HOLD. Only the most genius (or, typically, luckiest) of investors are able to get out and back in at the most optimal times. Yet, these still do not usually fare as well as those that merely stayed invested and weathered the storm. 

In fact, according to data from JP Morgan, investors who invested $10,000 in the S&P 500 from December 1999 and held it there until December 2018 would have seen their investment grow to $30,000, or 200%. This compares to a total return of $15,000 for an investor that missed just 10 days over these 19 years, and $6,213 for an investor that missed 30 days: investors who might have been trying to avoid the many crises that befell this period of history. These include the tech crash of 2001 that saw Amazon shares decimated for eight years, the Global Financial Crisis of 2008/09, the "taper tantrum" of 2013 that sunk Asian markets, the European debt crises, and more. 

The long-term lesson in crypto is even starker: since its launch in 2009, Bitcoin has returned more than any other asset in global markets. Since 2013, when it became widely available on exchanges, it has returned 16,160% - and that is at today's level of around $22,000, which is 60% off its all-time high. As Goldman Sachs highlights in its recent commentary on investing through global political crises since 1969, over a long enough time period - everything comes out in the wash.

Of course, none of this is to diminish the losses that many people are facing right now. And not just in crypto markets, either. Stock markets are also taking heavy losses in the face of rampant inflation and imminent monetary tightening. After more than a decade of loose policy that has seen us all become addicted to easy money, even the biggest companies in the world are facing sharp losses this week. People are suffering, and there is no doubt more pain to come.

Many analysts are calling it a global recession, which hopefully will not be the case. In terms of the crypto markets, however, we can be certain now of a prolonged winter. May 2020 to November 2021 seems to have been our dot-com boom. As was seen for the earliest tech companies, it may be some time before we return to former heights and only the fittest will survive. During this period many crypto projects and protocols will go the way of pets.com, but many others will go the way of Amazon. Those investors able to hold onto the reins through this difficult time will no doubt be rewarded in the end.