As of January 2018, the total market cap for cryptocurrencies was over $830 billion. A few months later, it had crashed down to just $210 billion. That’s a significant drop, and for anyone who invested in cryptocurrencies near the peak, it would have been a major loss. If you’re new to the cryptocurrency world, it can be daunting to watch prices go up and down so rapidly. But don’t worry – we’re here to help! In this post, we’ll give you 5 tips for navigating a crypto crash.
Why is crypto crashing?
Cryptocurrencies are crashing and investors are panicking. But what’s actually causing this, and more importantly, what can you do about it? To start, it’s important to understand why cryptocurrencies are crashing in the first place. There are a number of reasons, but some of the most common include:
-Fraud and manipulation
-Lack of mainstream adoption
Has crypto crashed before?
Cryptocurrencies are a relatively new investment, and as such, they are susceptible to large fluctuations in value. In the short history of cryptocurrencies, there have been a few dramatic crashes. The first major crash occurred in early 2014, when the price of Bitcoin fell from over $1,000 to just over $300. More recently, in January 2018, the price of Bitcoin fell below $10,000 after reaching a peak of nearly $20,000 just a few weeks earlier. Cryptocurrencies are highly volatile and can experience large price swings in a very short period of time. It is important to be aware of these swings and to understand that they are a normal part of the cryptocurrency market.
Learn more: What Is Blockchain?
What are the risks of buying crypto?
One of the biggest risks of buying into the crypto world is the volatility of the market. Prices can change drastically in a short period of time, and it can be difficult to predict when the market will recover. Another risk is that many of the projects in the crypto world are still in their infancy, and there’s no guarantee that they will succeed. There’s a chance that you could invest in a project that fails, or that your cryptocurrency could be stolen if it’s stored on an exchange. It’s important to do your research before investing in cryptocurrency and to be aware of the risks involved. If you’re not comfortable with these risks, it might be best to wait until the market becomes more stable before investing.
How does crypto fit into your portfolio?
It’s important to think about how cryptoassets fit into the rest of your portfolio. If you’re heavily invested in stocks, for example, it might not make sense to invest in cryptoassets as well. On the other hand, if you’re looking to add some risk and diversity to your portfolio, cryptoassets could be a great option. Just make sure you’re aware of the risks and that you don’t invest more than you’re willing to lose. Another thing to keep in mind is that cryptoassets are incredibly volatile and can experience sharp price swings. So if you’re not prepared for that kind of volatility, it might be best to stay away. At the end of the day, it’s up to you to decide how much crypto you want in your portfolio and what kind of risk you’re comfortable taking. But these are definitely some things to consider before making any decisions.
5 Tips for Beginners
Do your research – In times of market volatility, it’s more important than ever to do your research before investing. This is especially true in the crypto world, where prices can rise and fall at a moment’s notice. In a bear market, it’s especially important to be strategic in your investments and make sure that you’re not overinvested in any one coin. Do your research on different coins, read white papers and listen to expert opinions to get a better understanding of the market. That way, you’ll be able to make more informed decisions when it comes time to buy or sell.
Stay calm and don’t panic sell – One of the worst things you can do when the market drops is panic sell. Crypto is a volatile market, and prices can rise and fall quickly. When the market dips, it can be tempting to sell off all your holdings in an attempt to minimize your losses. However, this often leads to even bigger losses in the long run. Selling when the market is down only exacerbates the problem and causes prices to drop even further. Instead of panicking, try to stay calm and rational. Remember that the crypto market is still in its infancy, and prices will rise and fall over time. Don’t let short-term dips scare you out of the market altogether.
Diversify your portfolio – One of the most important things to remember when it comes to crypto is that you should never put all your eggs in one basket. In a market as volatile as this, it’s essential to spread your investments out and diversify your portfolio. That way, if one coin takes a tumble, you won’t lose everything. Instead, you’ll still have some investments that are doing well, and you can use that money to buy into other coins that are growing in value. A great way to start diversifying your portfolio is by investing in a mix of altcoins and tokens. Altcoins are coins that are not Bitcoin or Ethereum, and tokens are digital assets that represent something else, like a product or service. By investing in a variety of altcoins and tokens, you’ll be able to minimize your risk while still having exposure to the crypto market.
Keep an eye on news and events – One of the biggest things you can do to protect your investments is to keep an eye on the news. Following crypto news will help you understand what’s going on in the market and could give you a heads up about a coming crash. You should also be aware of any events that could affect the market. For example, if there’s a major hack or if a country announces that they’re banning crypto, this could cause a crash. Being aware of these events will help you prepare and potentially avoid losing money.
Don’t invest more than you can afford to lose – It’s important to remember that investing in cryptos is always a risk. No one can predict the future, so if the market crashes, don’t invest more money than you’re willing to lose. You could end up losing everything you’ve put in, so it’s important to be smart about it. Remember that this is a new market and there’s no telling what could happen. Don’t invest more than you can afford to lose, and be prepared for the worst case scenario.
Cryptocurrencies are still a relatively new investment, and as such, they are incredibly volatile. This means that they can go up or down in value very quickly, and it can be difficult to know when to sell or buy. However, by following these five tips, you can make sure that you handle a crypto crash as best as possible and protect your investment.