Winter breeze most certainly freezes everything, be it in the air or in the trading market. And, just how easy and fun it is to reap benefits out of the bull runs, it is equally important to be decisive about your stance amid bearish waves.
Evidently, the recent FTX collapse has struck panic at a large scale, many are looking to dispose-off their holdings and exit the market too. But, ask yourself, as big a pool of opportunities as the crypto market is, will it be a smart move to quit on the pretext of some ceaseless market ups and downs?
In most cases, your answer will be no, so, instead of distressing over the havoc of market conditions, try doing the things listed below to minimise your risks, and maximise your returns for the next bull run!
Eye some large-cap crypto coins!
First things first, so, if you are looking to minimise your risks, the first thing you should do is invest your money in blue-chip assets such as Bitcoin and Ethereum. They have an established track record of so many years.
Being two of the oldest in existence, Bitcoin and Ethereum both have faced a steep downturn in the market on multiple occasions, but each time, bounced back stronger, this backs their reliability as compared to new currencies that have popped up in the market recently.
In short, these two cryptocurrencies are relatively a lot less risky than others, besides, this bear market may prove to be a great opportunity for you to get these assets at a lesser rate, making you a substantial profit in the long run.
Diversification of your portfolio.
If you have been in the crypto market for quite some time, you sure would have come across the word “maxi” or “maximalist” which refers to an enthusiast who has maximised his or her portfolio by investing in just one asset. Although, this strategy might have been beneficial in the initial days, practicing it in the current bear run could really be injurious to your portfolio.
Crypto portfolio should be like an Indian thali, with all the varieties rich in different nutrients. You must ensure having a similar diversification so as to yield maximum returns and minimal distress on one as luck would have had it, a dysfunctional asset. Major exchanges give you an advanced option to auto-diversify your portfolio through a feature called crypto-baskets. Saving you a lot of time and energy. These baskets are categorically segregated, you can choose based on your expectations and requirements.
Focus on long-term success
Third and the most important part is to focus on the benefits of the long term, and how do you do that? You look for real-world utilities of the assets that you are investing in. So, as to ensure the relevance of its existence in the future. Take Ethereum for example, it’s a platform of multiple activities, including, games, smart contracts, DApps and other things, which is not going to become redundant anytime soon.
Whereas, meme tokens, which could be hyped up by literally and up-trend or down-trend are only good for short-term profit making. These tokens offer very little real-world utility, even though they have got immensely large community backing.
Things to avoid this crypto winter
- First off, there is no such thing as profits just made in the bull runs, even the bear market provides ample opportunities for you to learn and invest in the most profitable way. Obviously, the gains won’t be as great as those in the bull run, but still, they’ll be counted as gains.
2. Second, one thing you should take care of as an inexperienced trader, is never ever acting on your gut feelings, they can be coincidently right for you at times, but backing them with appropriate research will always save you from unforeseen losses, especially during the bear run.
- Do not overtrade! Always try to invest in quality projects, hedge your risk and be insulated against the crypto winter chills!
Now, go easy and swiftly navigate through this crypto winter!
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Disclaimer: Crypto products are unregulated as of this date in India. They could be highly volatile. At Unocoin, we understand that there is a need to protect consumer interests as this form of trading and investment has risks that consumers may not be aware of. To ensure that consumers who deal in crypto products are not misled, they are advised to DYOR (Do Your Own Research).