Cryptocurrency News: If you are a new investor in the cryptocurrency exchange, there are a few basic rules to know. In this article, it is mentioned what the experts’ recommendations are in case of a fall in cryptos. All information in the content is for educational purposes only and does not contain any investment advice.
Cryptocurrencies were doing pretty well in early 2021, with the price of several cryptocurrencies hitting record highs. Crypto enthusiast and investor, Tesla (TSLA) – Elon Musk, CEO of Get Report; tweeted the rocket and moon emoji and “to the moon!” With the call, large and small investors entered the market.
However, the boom ended after the spot price of the most popular cryptocurrency, Bitcoin, approached $65,000 in April, and by early June, its value dropped by nearly 50%. This caused new crypto investors to feel great shock.
Kiana Danial, author of the book “Cryptocurrency Investing For Dummies,” said, “It is very interesting that every time Bitcoin goes up, it attracts attention and people get excited.” But Daniel describes the last person to buy when the price is at its peak as “the person who will panic the most when the price inevitably drops.”
So, what should you do if your digital assets like bitcoin are losing their value and going into collapse? Here are some crypto experts’ ideas.
Keep in mind that Bitcoin and other cryptos can be ephemeral
For those who have invested in cryptocurrencies for years, extreme gains and losses are nothing new. For example, Bitcoin hit the previous record high of around $20,000 in December 2017, but a full year later it was trading below $3,500 in December 2018.
Greg King, founder and CEO of Osprey Funds, an investment firm specializing in digital assets, said: “As Bitcoin gets adopted, the ups and downs can be breathtaking. Having a long-term perspective puts these moves in perspective.”
Low prices are welcome for seasoned bitcoin traders. Kiana Danial said, “In this case, the decline in Bitcoin is seen as an opportunity to buy.”
Understand the risks before investing
Before making a move by using it as a buying opportunity when cryptos drop, King states that investors should ask themselves two questions:
“‘Would an 80% to 90% drop in your crypto cause you to lose sleep at night or sell?’ If the answer to any of these is yes, don’t invest.”
Danial says, “Ask yourself how much money you can really afford to lose, because every investment has its own risk.” He draws attention to the risks that may occur with his words.
Individual investments should be part of your portfolio rather than dominating it.
Crypto experts recommend avoiding “all-in” moves when deciding to invest. “Avoid buying large amounts of crypto in one go,” says Jake Yocom-Piatt, co-founder of Decred, a cryptocurrency with a market cap of $1.5 billion.
Because he states that if the values decrease afterwards, it will be more difficult to remove psychologically. Instead, he says, budget control can be made easier by purchasing small quantities each month.