It’s no secret that crypto has been fluctuating wildly lately. Some coins have dipped as much as 90 percent, while others have gained 2,000 percent within the same year. It can seem like trying to make sense of it all is an impossible task, but if you want to know who will be left standing when the dust settles, read on to learn the value of diversification and of choosing your investments carefully before making any moves in this volatile world.
It is a tough time to be an investor in the crypto space. Bitcoin (BTC) and Ethereum (ETH), two of the most popular cryptocurrencies have plummeted in value this year alone. Bitcoin has fallen from its all-time high of over $19k USD to about $6k USD. Ethereum has crashed from a value of $1,400 USD at the beginning of the year to just over $200 USD today.
It's a scary time to be in the crypto game. Can crypto recover from crash? With Bitcoin down 90% from its all-time high and Ethereum down 85%, it feels like the market is drying up. The question on everyone's mind right now is: who will be left standing when this crypto crash finally ends? There are companies and individuals who have been here since the beginning of this crypto craze that are still here. They've seen ups and downs but they're still going strong.
A bull market is when a stock has a price that is increasing. A bear market is the opposite of this and is when prices are decreasing. You can tell which type of market we're in by looking at the trends on the graph. If it's going up, we're in a bull market. If it's going down, we're in a bear market. For example, if you invested $1,000 in an asset worth $2,000 during a bull market and then sold it during a bear market for $1,500 you would have made a profit of $500. But if you had invested the same amount during a bear market where the asset was worth only $1,500 then you would have lost money because your investment only yielded $500.
We all know that the cryptocurrency market has been on a roller coaster ride with its highs and lows. This latest crypto crash will most likely not be the last. While it's important to have a strong understanding of how cryptocurrencies work, it's also important to prepare for what might happen in the worst-case scenario. The following steps can help you weather any storm:
- Diversify your portfolio by investing in other assets like stocks and bonds or by holding different types of cryptocurrencies such as Bitcoin and Ethereum.
- Maintain realistic expectations about the possibility of growth in the future.
- Keep some money set aside to buy back into investments if they become cheaper at a later time.
- Don't let FOMO (fear of missing out) push you into panic decisions like buying when prices are already high or selling when prices are already low
