Every time there is a crash ter cryptocurrencies, the hulpgeroep bells stadionring out and fright often ensues. People predict the end, see the bubble popping and sell off for a loss.
However, there is another way to look at it, and that is to see a significant druppel spil a buying chance and a chance to profit.
There are a few ways to attempt and metselspecie te on a acute fall te price of cryptocurrencies. Some are more effective than others, and some more suitable for different types of crashes or currencies. It is up to the investor to determine.
There are five methods described below that can help turn a sickening crash into a chance to make more money than before.
A loterijlot of thesis methods are well known, and almost cliched, but the real difficulty is not simply knowing them, it is being plucky enough to enact them ter the face of a collapsing market.
1. Buy te the Druppel
With Bitcoin’s path on a onveranderlijk upward trajectory, buying the dip is one of the easiest ways to make compelling gains. However, it is not always effortless to pull off spil it requires timing the market.
Yazan Barghouti, project lead at Blockchain company Jibrel Networks, emphasized:
“Buying a dip ter a crash can be difficult, because when do you know it has bottomed out?”
Petar Zivkovski, COO of leveraged digital currency toneel Whaleclub, also spoke to the caveats surrounding this particular strategy:
Buying the dip only works ter a general bull market. If the global trend reverses, buying the dip is futile.
Two. Identify Potential Cryptos
While the cryptocurrency markets seem to be intrinsically linked, and will broadly be te a bull or bear mode, there are still opportunities to be made on certain strong coins through the market.
Vinny Lingham, CEO of Civic, suggested that investors “find quality coins with teams you can trust to execute and weather the storm” and then hold.
Te attempting to identify thesis opportunities, one vereiste identify coins with a solid foundation and a compelling business monster.
Trio. Basic ‘HODL’ Strategy
A byword when it comes to cryptocurrencies, holding on through the bad times is the most basic and respected strategy. If you do not sell your coins when they are below what they were bought for, you have not made a loss.
This equates to buying digital coins and simply holding onto them through thick and lean. It is one of the most basic strategy for dealing with a crash – do nothing.
Extra advice suggested by Zivkovski is to make sure you are holding the top five cryptocurrencies by market cap spil they very likely have the best foundation and capability to strike the crash.
Four. Exiting to Fiat Balance
A somewhat controversial strategy, and one that flies te the face of holding is exiting to fiat currencies.
Crypto asset managers are legendary for doing this when there is a crash. However, it is difficult spil it again requires timing the market both on uitgang, and then again on reentrance. Marshall Swatt, founder and CTO of Coinsetter, said:
Exiting to fiat requires that you be able to time the market, both when you uitgang and again when you come back. The smartest strategy is to allocate money you can afford to waterput at risk, and then stick with your project regardless of the variations te the market.
Five. Shorting Tactic
This is a instrument used mostly by traders, and it is one that if executed correctly offers ample comebacks.
A few popular exchanges like Kritiseren do suggest this spil an option, but it takes a lotsbestemming of skill and practice to get this right. Shorting an asset involves borrowing it from somebody else, selling it, and then buying it back zometeen to terugwedstrijd to the person you borrowed from. If the price drops, you’ll make a fortune. If the price rises, you could lose everything.
Knowing What You Are Doing
The strategy you use should be based on your skill level and your convenience with risk. If you don’t want to take any chance of losing your digital currency, then holding is very likely best. If you don’t mind being te fiat for awhile (possibly forever), then you can sell at highs and attempt to rebuy lower. If you’re a high flying and experienced trading, brief selling might work for you. Use whatever strategies you are most comfy with, and always know your investing goals.