The incredible crypto run of 2021 crashed miserably in 2022. While the high may seem like a thing from the distant past, the crypto crash is still in the present. Most major players in the crypto space have had to lose the profits gained during the 2021 run. However, this crash is not restricted only to cryptocurrencies. Stocks have been plummeting the world over with the US policymakers trying to decrease inflation by tightening the noose around rising interest rates and monetary supply lines.
The crash has affected people worldwide, especially those in the US who shifted there for work amid the crypto boom over the past few years. Many even sought immigration law advice US before moving to ensure they are protected. However, several shifted out of the US, opted for countries like the UK, and took up regular jobs to bridge the sudden gap in their income streams due to the crypto crash. These people preferred employment and work visas, with companies offering a sponsorship license to cover their bases.
Either way, the mass exodus of people moving, the constant inflation, and the volatile stock and crypto crashes have left people floundering for ways to survive it.
How To Invest In Crypto?
Many people make the mistake of going ‘All in’ with crypto stocks. All financial experts (including crypto experts) advise buying crypto piecemeal. This means that it is not a good strategy to purchase vast amounts of any one type of cryptocurrency. Instead, potential investors should buy small quantities of the coins, observe the market trends, research the ups and downs, and then purchase more if needed.
Experts advise buying a little of the same stock each month instead of putting all your eggs in one basket. Also, they suggest researching and reading about the different types of cryptocurrencies, their applications, and their uses before investing so you know where your money is going.
Since crypto has historically been more volatile than other financial instruments, it is best to have a diverse portfolio of stocks, mutual funds, and bonds before purchasing cryptocurrencies. Doing this helps protect your investments while buying cryptos from the excess leftover money.
How to Survive the Crash?
Buy the Dip:
Everyone in the crypto and investor space has heard about ‘buying the dip.’ But what is it? Buying the dip does not mean panic buying; it means researching the coins and following the trends carefully before purchasing a few that you can profit from later.
Buying the dip is a long-term perspective that should be considered over a few years. It is not a quick money strategy to cash out. There may be coins or tokens on your watchlist for a while. You may also want to buy more units of a currency that show future promise but are affected by the overall market.
Buying the dip should be a strategic move to survive future crashes and make a profit when the timing is right. However, since this is highly speculative, you should do the research before investing any money.
Don’t Panic Sell:
It is human nature to cut our losses before we fall into a deeper hole. However, selling during the market will not help you recover the entire investment. Selling your assets at a loss will not help with the subsequent recovery. Panic selling ‘may’ work in case of crashes that are gradual. However, if the crash is sudden, there is a high possibility you will lose more money than you bargained for in the long term.
The highest risk in panic selling is the speculative nature of the crypto and stock market. For example, when you purchase a coin for an ‘x’ amount and sell it for a 20% loss, you may lose out when it returns to its original cost or surpasses the initial investment cost.
Think Long Term:
While it is true that the market has crashed horribly, it is also true that historically hit cryptocurrencies have soared to greater heights after recovery. Significant value dips usually result in massive gains for those that ride the crash out.
One good way to estimate and predict the highs and lows is to avoid concentrating on the daily candle charts and instead follow the annual graphs of the currencies. These will prove more informative than a day-to-day analysis and help you prepare for the dip and the rise.
As long as you haven’t taken out a loan or invested all your money in the crypto market, you should wait out the crash and follow the trends closely to make a profit later.