Alexander Rosemary

Nov 25, 2021

2 min read

How to Behave When You Think Cryptocurrency Is Crashing

Cryptocurrencies were all the rage this year, with the prices of several coins surging to record highs. But after the spot price of bitcoin, the most popular coin approached $69,000 recently, values have entered a turbulent stage. Though this doesn’t mean the rally is over, many would like to know what to do next.

So, what do you do when your digital assets crash?

Accept it

For those who have been investing in cryptocurrencies for years, dramatic gains and losses are nothing new. For seasoned bitcoin investors, lower prices are welcome. See the drop of value in bitcoin as an opportunity to purchase.

Understand your risk appetite

Before deciding to invest in bitcoin or other cryptos, consider whether an 80% to 90% down move in your crypto holdings would cause you to lose sleep at night. If the answer is yes, don’t invest.

Avoid buying large amounts of cryptocurrency all in one shot

Buy a small amount every month and then just keep doing it, as the price goes up or the price goes down, as opposed to buying it all in this one single crystalized cost which you’re going to have to deal with psychologically for the foreseeable future.

Hodl and earn

Fortunately, today many platforms allow you to earn cryptocurrency passively. If you’ll see the interest rate in the bank — you’ll probably laugh in the face of the manager, then in the cryptocurrency market, you can earn up to a solid 17% per annum. This approach will only help you to increase your capital in the future.

Let’s hope this rally is not over yet. However, always keep your eyes open. Feel free to share your thoughts about your strategy in the comments down below, or enter a couple of discussions in this up-to-date Crypto/DeFi discord channel.