How to Manage Cryptocurrencies during a Global Crisis: 7 Tips to Look For
For a variety of reasons, including the possibility for better returns and its distinctive structure, Bitcoin has acquired value and become a popular commodity among investors over the last decade or so. However, many individuals are still hesitant to invest in the unregulated realm of cryptocurrencies, particularly in these difficult economic circumstances.
Introduction
We live in uncertain times, with people all across the world expecting a global recession as a result of the COVID-19 outbreak. Investment alternatives may not be the first thing that comes to mind while trying to be thrifty, but certain things are worth investing in.
One of them is cryptocurrency. According to recent data, a growing number of people are taking the leap and investing in Bitcoin. Aside from their economic potential, BTC and Altcoins have several additional advantages, including quick, convenient, and secure payment options. These are just a few of the reasons why many online casinos accept digital money as a form of payment. Furthermore, owing to its desired characteristics and usefulness, some even provide it as the sole mode of payment.
To make things a bit easier for investors, we’ve compiled a list of the key things they should know about investing in digital currencies during a crisis.
- Do not Panic:
First and foremost, it is critical to remember that we have been here before. While the cause of the current economic crisis is different, recessions, depressions, and corrections are all normal market cycles. To that purpose, the first rule is never to panic or make judgments based on fear.
2. Invest in Bitcoin:
Any hedge fund manager or person who assesses the risk of their portfolio should reach the same conclusion: purchase Bitcoin. Bitcoin and cryptocurrency, in general, are perhaps the world’s only completely uncorrelated assets, meaning that their value is not driven by the same underlying variables as anything else. This adds idiosyncratic risk to your portfolio, in contrast to the systematic risk of every other asset.
Everyone should have a modest stake in Bitcoin because it protects them from inflating money and harmful factors. This is necessary for risk management to be effective.
The ideal strategy for a retail investor to invest in Bitcoin is to dollar cost average. Dollar-cost averaging eliminates the uncertainty and danger of purchasing everything at once. It is a price-agnostic technique that allows you to buy dips in a moving market over time.
3. Fundamental Analysis:
The focus in 2022 will be on better understanding the coin or token. With new participants entering the market on a regular basis, knowing the tokenomics, roadmap, market cap, and utilities will have a significant influence on selections. If you’re not familiar with the concept of fundamental analysis, reputable exchanges ensure that only proven, safe, and dependable tokens are accessible for you to choose from.
4. Account Volatility:
The present crypto market, according to Nils Gregersen, CTO of Paycer, is seeing a big surge. And this tendency may cause a lot of volatility in the coming months as consumers begin to cash out their holdings.
And, given the prevalence of ‘Pump-and-Dump’ (Pumping an asset means creating a sense of inflation just to drive the prices up) strategies in the crypto arena, there may be some cooling or delayed consolidation. However, this is not causing concern. Not if you’re a cryptocurrency investor.
5. Go Old School:
Bitcoin (BTC), Ethereum (ETH), and several protocol Altcoins such as Polkadot (DOT), Polygon (MATIC), and Solana (SOL) are more akin to old-school crypto kingpins. These assets are designed with mining scalability, transaction efficiency, blockchain interoperability, and other considerations in mind, making them reliable investment instruments.
As an investor, if you’re not convinced by the new cryptocurrencies and their stated use cases, keeping to the book and evaluating these tried-and-true crypto players appears to be a better option. If you want to learn more about any of these assets, buyUcoin has you covered.
6. Diversify:
Diversification and reaping the advantages of growth from various coins is the greatest method to securely catch the total growth of cryptocurrency. Also, between January 2016 and January 2018, Corgicoin climbed by 60,000 times, whereas Verge increased by 13,000 times. During the same time frame, Bitcoin has grown 34 times. While Bitcoin would have provided you significant returns, diversifying into other coins may have provided you with even greater returns.
7. Do not always buy the ‘Dip’:
You must have been buying dips as an investor for quite some time. However, with the market anticipating a cooling and consolidation, any decrease in 2022 will be unprofitable. To be safe, focus on value-buying if the market or the appropriate crypto-asset experiences a new boom.
Conclusion
At the end of the day, one of the most significant obstacles investors have when contemplating crypto as an asset is avoiding getting swept up in the excitement. Despite the fact that digital currencies have grown important in the portfolios of many large investors, and there has even been some institutional acceptance, experts continue to advise investors to remain cautious owing to the volatility connected with crypto.
If you are considering investing in the cryptocurrency market, it is critical that you conduct thorough research before investing your hard-earned money.
While 2021 was the year of cryptocurrency dominance, 2022 will reshape the term “crypto resiliency.” And as an investor, your main focus should be on information acquisition throughout the year. Additionally, services such as buyUcoin are there to assist you with comprehensive listings, trading tools, risk analyzers, and more.
How to Manage Cryptocurrencies during a Global Crisis: 7 Tips to Look For was originally published in BuyUcoin Talks on Medium, where people are continuing the conversation by highlighting and responding to this story.
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