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Investing in virtual currencies has become quite a booming business given the large number of stablecoins in the cryptocurrency market. Many investors make millions by investing in cryptocurrencies such as Bitcoin or Ethereum. However, others lose billions in the event of a crypto crash. So how do you survive a crypto crash? Which cryptocurrency should you bet on in this rather unstable market? The answers right away.
The basic rules to follow in the event of a crypto crash
An investment in cryptocurrency (bitcoin, ethereum, etc.) is quite risky because the price and price can change at any time.
Bitcoin price instability stands at more than 141 in a month, while Ethereum price can easily pass 186.
Indeed, the evolution of the currencies shows an average volatility that fluctuates around 9 to 10. An investment that yields 10x or 100x returns is in most cases quite risky. So it is necessary to measure your investment properly to avoid losing much more than you put in.
However, if you still want to enter the unforgiving world of the crypto market, here are some strategies and tips that can save the day:
Do your research before entering the crypto market
What to choose between the different altcoins when you start investing in cryptocurrency? Do you want to keep your capital safe in your wallet or turn it into hundreds of billions on a crypto platform, even if it comes with risks? In general, cryptocurrency exchanges do not include insurance or protection, so the risk of losing your capital is quite high. However, you can make millions and billions if you know how and when to invest your money.
How crypto platforms use your capital is quite arbitrary. After all, the stock exchanges do not provide information about the actions they carry out with the capital. Investigating the cryptocurrency market and platforms is the only solution to avoid losing money during the cryptocurrency crash.
Do not try to predict the development of the cryptocurrency market
Depending on the period, Bitcoin or Ethereum’s price trend could experience a significant drop, as has happened in recent weeks. This does not mean that the crypto has bottomed out. When entering the crypto market, one should avoid predicting its course by looking at the cryptocurrency. The market forecast is only 60% likely.
Avoid short-term stock trading
The crypto market is very unstable, which means that the price of Bitcoin or Ethereum can fall or rise at lightning speed in one day. Thereby, If you are one of the investors new to the world of cryptocurrency, you should avoid placing your capital on short-term trading at all costs. At the same time, for strategy you should avoid leverage at all costs, which is quite common in the crypto world.
Knowing how to adapt during the crypto crash
To survive exploring the cryptocurrency market, you need to focus on stablecoins like Bitcoin or Ethereum. The thing is, if you follow crypto, you can see that the crypto market is following the same wave as the average financial markets.
In general, professional investors avoid the fall of crypto by placing their capital only in stablecoins such as Bitcoin and Ethereum. indeed, thee Bitcoin is one of the cryptocurrencies that dominate the market, regardless of the change in the price of other cryptos. Therefore, when the cryptocurrency market falls, all investors will expect BTC (Bitcoin) to be the first to recover, even against Ethereum (ETH), one of the stablecoins.
Thereby, a large part of the capital or your actions should be spent on Bitcoin (BTC), regardless of the change in the speed of this cryptocurrency. The other parts of your assets must be spent on other stablecoins such as Ethereum. You can also keep the other part of your assets as fiat currency (dollars, euros, etc.).
When cryptos fall, Bitcoin price falls along with other cryptocurrencies. The best strategy to follow is to spend your capital well to reduce the loss of money, until the time when the crypto market price bounces back. This will greatly help investors stabilize their actions in the crypto market. Adjusting your position should be done gradually. When the price of Bitcoin rises, you can convert some of your assets into other cryptocurrencies such as Ethereum.
A trader should keep in mind that the crypto market can experience a sharp decline or a rapid rise in a very short period of time. So you need to know how to spread your stocks to prepare for a crypto crash.