I want to preface this post by saying that I have not studied economics, and these are just my blissful wishes.
For a while this little scenario has been playing in my head:
Say you have 1 Bitcoin. The price is say $50k. At any point in time you sell, you will get 50k, if the price, however, drops below to say $40k, you have a perceived loss of $10k, yep you still have your 1 BTC, but you can buy less USD than you could before. There will come a day when Bitcoin is not valued in USD, but until then, we will stick to the basics.
When stablecoins were first introduced, I did not read about them nor understand them, and ignorantly thought it was a tool to lock the price of a pair such that if the price did drop by $10k, you'd not be unaffected but if it increases, your portfolio would still rise. Because trading is a zero sum game, this is impossible but I still want to continue.
The same goes if we reverse the situation. If I sell 1 Bitcoin at $50k, yes I will have $50k, but if the price increases of Bitcoin to $60k I still have a perceived loss of $10k. The reason I say perceived is because you cannot lose something you never had, right? But some people like me don't experience situations like this as simply perceived loss, for me it's a real loss.
If I decide to buy back Bitcoin with $50k, while the price is $60k, I can only buy 0.83btc, all of a sudden I have a 0.1666 btc perceived loss.
Wouldn't it have been great if my money would still somehow buy me that 1BTC? It's just a dream because if this was possible, you'd have a way to infinitely multiply your holdings.
With that story out of the way, what methods exist, if they even exist, to reduce this perceived loss? Hedging?
Ifs, buts and when are terms that do not have a mainstay in crypto currency. In as much as the crypto currency market is concerned; you are not in profit until you take profit and have it in your wallet as btc, usdt or eth. Also investment is not about ifs or buts, it is about buying low at a low price and selling high at a good convenient value. Forget about the ifs and do your research to enable you trade and invest without conjunctions