Bank of America: Panic selling often leads to missed opportunities, it is recommended to hold Bitcoin for a long time

Panic selling often leads to missed opportunities when investing in financial markets, Bank of America concluded after a comprehensive study of the S&P 500.

Bank of America strategists traced data back to 1930 and found that a basic holding strategy would have a total return of 17,715%. On the other hand, if investors try to time the market, they may miss the best trading days. If the S&P 500 missed just 10 best trading days every 10 years, the total return would drop to 28%.

For many investors, especially inexperienced ones, it is natural to want to sell after a severe downturn. But Bank of America found that the market's best trading days often follow the worst declines. Panic selling during a decline can cause investors to miss out.

Savita Subramanian, the bank’s head of U.S. equity and quantitative strategy, explained:

“Staying invested during turbulent times helps recover losses after a bear market, which takes an average of 1,100 trading days to recover.”

Cryptocurrency investors, especially Bitcoin holders, are known for their low time preference. Industry data shows that more than 60% of Bitcoin's circulating supply has not changed in a year or more, reflecting people's growing confidence in Bitcoin. Even during the recent price surge, only 36% of Bitcoin's circulating supply has changed in the past six months.

Experienced cryptocurrency holders have adapted to the fact that timing the market can cost them dearly in the long run.

Just like stocks, Bitcoin’s ten best trading days each day are a significant source of its gains. During the 2017 bull run, Bitcoin prices gained an incredible 1,136% during its 10 best trading days of the year.

Some entrepreneurs are trying to apply innovations in artificial intelligence and machines to help traders manage emotions. One example is Stock Cards, a browser extension designed to help investors predict and prevent FOMO and panic.

Long-term Bitcoin investors are profiting from their HODL strategies, with the 2021 rally creating thousands of Bitcoin millionaires.