As Independence Day approaches, many Americans take a moment to think about what freedom really means.
Some people define freedom as the ability to do whatever they want without consequences or responsibility. That may sound appealing, but it isn’t how freedom – or investing – works.
Here is a more useful definition for our purposes: Freedom is the ability to make informed decisions for yourself and accept the risks and consequences that come with them.
That does not mean ignoring evidence, dismissing expert guidance or refusing to consider other perspectives. It means making choices based on your own goals and circumstances rather than allowing headlines, price swings or the crowd to make them for you.
That principle is especially relevant in today’s cryptocurrency market.
Let’s talk about what bitcoin is doing
Bitcoin is in a deep drawdown.
On June 26, Business Insider reported that bitcoin was trading near a two-year low of $59,200 – approximately 53% below its October 2025 all-time high above $126,000.
(Because cryptocurrency prices can change quickly, those figures are a snapshot from the date of the report rather than a current price quote – check current crypto prices on our ticket at the top of the page.)
And recent fund flows also suggest that some investors have been shifting their attention – and their money – toward the market’s newer success stories.
On June 5, Reuters reported that investors had withdrawn more than $2.7 billion from major bitcoin exchange-traded funds during the preceding week. At the same time, four large semiconductor funds attracted more than $3 billion during the first week of June as enthusiasm for AI-related sectors continued.
Reuters also identified highly anticipated IPOs such as SpaceX as additional competition for speculative capital.
But the appetite for fast-moving opportunities is not limited to AI. Prediction markets, many of which offer contracts tied to sporting events, have also expanded rapidly. In June, Reuters reported that the Commodity Futures Trading Commission (CFTC) proposed new rules for the growing industry.
Prediction-market contracts, whether they’re about the fall of the Iranian regime or the winner of the Kentucky Derby, are not the same as long-term investments. Regardless of what the CFTC, Polymarket or Kalshi say. There is no direct evidence that capital leaving bitcoin funds is flowing into what is essentially sports gambling.
The rapidly-growing popularity of prediction market contracts, however, shows us just how quickly the newest speculative arena can become the next financial fad.
Now, this is not to say AI investments are inherently bad. Or that selling bitcoin is automatically a mistake. An investor’s circumstances, goals or outlook may have changed.
But there’s a big difference from, say, selling an asset to meet your RMDs and selling an asset because you want to fund a high-risk, high-reward gamble.
I think the danger comes from changing course solely because one asset or sector has recently fallen while another has recently risen. That is performance chasing – not a considered decision based on a long-term plan.
Research involving the behavior of retail investors offers a useful caution.
A University of British Columbia article summarizing research titled The Volatility of Stock Investor Returns showed that frequent trading, intended to capture asset highs and lows, is nearly always associated with lower returns. The same study also found that investors’ actual returns were more volatile than the underlying assets.
In other words, repeatedly changing allocations in response to recent performance adds risk. Most importantly, the risk of buying after prices rise and selling after they fall. “Buy high and sell low” is exactly the opposite of what investors want to do!
On the flip side, buying an asset because its price went down can be just as undisciplined. A lower price does not necessarily mean an asset is “undervalued,” and a drop of 50% doesn’t rule out another substantial decline.
Let me point out that this was a study of equity investors, not bitcoin or other cryptocurrencies. Even so, I think its lessons are universal.
A true investor’s goal is probably not to buy every dip or hold every investment forever. It is to make decisions from a plan rather than reacting to daily price fluctuations.
What does a more disciplined decision process look like?
First, let me be clear: There is no single investment strategy that is right for everyone.
Your time horizon, financial needs, risk capacity, portfolio composition and reasons for owning an asset all matter.
So let me share with you my process. Before buying, selling or continuing to hold an asset, I ask myself four questions:
- Has my long-term reason for owning cryptocurrency changed, or has only its price changed?
- How does this investment fit within my overall portfolio and target allocation? How much volatility or loss could I absorb without jeopardizing either my peace of mind, or my long-term goals?
- Am I prepared for the possibility that prices could fall substantially farther – or that an asset might never recover?
- Would a predetermined plan (rebalancing to a target allocation or dollar-cost averaging) be more logical and disciplined than an all-or-nothing bet on calling a bottom?
Obviously, these questions cannot tell me what bitcoin will do next. But they can help separate a considered, mindful decision from one driven by fear, excitement or FOMO.
One possible approach is dollar-cost averaging, which generally means investing equal amounts at regular intervals regardless of current market prices.
Investor.gov explains that this approach results in purchasing more units when prices are lower and fewer when prices are higher. That tends to lower overall price volatility over time, buti t’s not a magic formula. It does not guarantee a profit or protect against losses. Because it requires continuing to invest through market downturns, investors must also consider whether they have the financial ability and willingness to maintain the strategy.
That caution is particularly important with cryptocurrency. Bitcoin and other digital assets can be highly volatile and speculative, and substantial losses are possible.
A recurring purchase strategy may reduce the pressure to identify one perfect entry point, but it cannot turn an unsuitable investment into a suitable one. If the underlying investment thesis is wrong, continuing to purchase can increase the amount exposed to losses.
Once you have considered your goals, risks and overall portfolio, you can make a more deliberate decision about whether buying, selling or continuing to hold makes sense for you. (A qualified financial, tax or legal professional can help you evaluate how a decision may affect your individual circumstances.)
That brings us back to the idea of freedom.
Financial freedom is not demonstrated by buying bitcoin, refusing to sell it or rejecting every popular investment. It comes from maintaining control over your decision-making process.
It means doing your due diligence, considering credible information and making choices based on your goals and capacity for risk – not simply doing what a headline, influencer or excited crowd wants you to do.
It also means accepting both the potential benefits and the potential consequences of those choices.
To learn more about holding cryptocurrency through an individual retirement account, download our Free Crypto IRA Guide. And if you know that you’re ready to diversify into cryptocurrency now, you can open your own BitIRA account in just minutes.
Note that Traditional and Roth IRAs offer different potential tax advantages, eligibility requirements and distribution rules. Tax treatment depends on the type of account and the your particular circumstances.
