When prices of crypto drop below 20% of their last highest value, it is considered crypto winter or a crypto bear market. 2022 has not favoured the crypto industry, plunging bitcoin down by 69% since its all-time high in November 2021. The volatile industry has been a lesson for short-term investors and has given a better understanding of the unpredictable market.
Money is a secondary factor in the industry, as you can only double it when you understand what you are getting into. If you are a crypto investor in the winter phase, you might wonder how to buy crypto assets and minimise risk simultaneously. Read on to know more about it.
Manage Your Crypto Portfolio During the Crypto Winter
The phrase “crypto winter” likely came from a popular series, “Game of Thrones,” and signifies hard times and a protracted conflict. As an investor, you can diversify your portfolio to minimise the risks. While many sit back during the winter, experts often take it as an advantage and enter the industry to make the maximum of the prices. If you are planning to buy the dip, here are some of the best tips from industry experts.
Heard of Dollar-Cost Averaging
A famous NFT collector shared tips for investing in crypto and NFT in the crypto winter phase. One of the first steps was to utilise “Dollar-Cost Averaging”.
Setting up a DCA will help you avoid your potential upside and prevent possible damage. Once you understand your risk tolerance, you can set up automated triggers in your preferred exchange platform.
Look Out for the Most Volatile Investments
One of the essential strategies that every professional investor implements during crypto winter is to reevaluate the assets. This helps to understand the most vulnerable assets that will not survive the crypto winter. It is never too late to cut them off. Usually, this is seen in NFTs and small altcoins. If you are an active investor, keeping track of the prices and market analytics, you can save your assets by cutting down losses rather than wait to see them go underwater.
Risk Assets That You Can Afford to Lose
Experts suggest you avoid anything you cannot afford to lose. This strategy implements the most in a bear market situation. It is essential to be comfortable with what you can afford. Therefore, experts say, one must make rational decisions by keeping emotions aside.
Utilise the Winter Phase to Increase Your Knowledge
Evaluate your chances when you buy crypto during the crypto winter phase and choose the best action. If you are planning to hold your investment plans, utilise the time to learn more about the industry. Several experts are using the time to look for new projects and potential returns. According to the market history, if you are a bitcoin or Ethereum holder, it will not make much difference; therefore, instead of trading, keep it as it is.
Invest Double on Your Favourites
Once you have researched, you can evaluate the assets that are doing exceptionally well, even in the crypto winter phase. For example, if NFTs are doing great and providing good returns, feel free to double down on your favourite investments. With the proper knowledge and research, it is easy to survive a crypto winter and may even offer you an advantage in investing in your favourite assets.
How Can Crypto Exchanges Help You
When you invest through a crypto exchange, they can help you with multiple options to invest in. Some exchanges even provide a crypto portfolio management system that helps the investors make their assets and rearrange their investments to mitigate risks.
When you diversify your portfolio through an exchange, they provide advanced two-factor authentication and biometric login for added security. You can download complete reports of your transactions based on Australian dollars for easy and quick accounting. Hence, investing through a crypto exchange will make the process easier and safer.
Crypto winter was predicted a long time ago; however, with better strategies, it is possible to survive the crypto winter and triple your profits. The key is to “hold on” and wait for the phase to pass. Choose a reliable crypto exchange for a seamless trading experience.
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