Surviving Through the Crash and Setting up for Success in the Long Run

Few key tips for surviving through the crash and succeeding long term in the highly volatile crypto market.

19:35 15 February 2022

The start of 2022 has been absolutely brutal for the crypto pack, with the sell-off continuing into the new year.

 

Crypto tokens were on a roll and a key subject of discussion for the most part of last year. But the momentum stalled and the theme of discussion changed for the worse. The prices slid headlong into new lows: with Bitcoin plunging to its lowest levels since July; and other coins like Ethereum, Cardano and Dogecoin etc. following suit.

 

In times of chaos and uncertainty, it is quite normal for a retail trader or investor to panic and make hasty decisions. The typical response to any adverse correction is to dump all open positions in a rush and take whatever profits they’ve made so far or trim their losses in the fear that the ongoing slump might worsen into a deep bearish cycle.

 

But some are different in that they look to survive through the crash and set themselves up for success over the long term. Let’s look at a few ways you can brave the tough times and come out the other side a winner.

 

Keep Calm and Hold on

The key to come through a crash unscathed and to succeed long term in the market is to keep holding no matter what.

 

The main issue with the weak hands is they crumble under pressure far too easily.

 

Always on the lookout to cash out, they flee the market at the first sign of trouble. Surviving through the crash is the last thing on their minds. Perhaps, they can pick up a thing or two from the hodl-ers who demonstrate nerves of steel even during a sharp correction. 

 

No matter whether the value of their holdings grows manifold or reduces by half, these diamond hands just hold.

 

Having entered the game early on when cryptocurrencies weren't even mainstream, they possess a definite price advantage that gives them additional runway for holding firm through a deep correction for much longer, one may argue. 

 

But let’s give credit where it’s due.

Many crypto superstars today have made a mark for themselves on the crypto hall of fame by showing unwavering commitment to hold and having a long-term perspective. They’ve spent more time in the market than the average individual, and gone through the wild, volatile swings that these digital currencies have come to be known for. Knowing crypto, it could be a mad bullish rally to fresh levels in the first half of the year, and a morale-sapping plunge to lows in the other, and an extended period of lull for over several months. In spite of everything, they always look to stick to their guns and sail through the tough times; and, when the price bounces back to soar to new highs, they resist the urge to cash out.

 

As has been the case since its beginning, crypto goes through more than its fair share of ups and down; peaks and valleys; ebbs and falls- however you want to call it. And that makes it incredibly difficult to time the market unless you have access to an intelligent trading algorithm like the-crypto-superstar.com/de. Head on over to the site to figure how using this software can help you navigate the treacherous terrain of crypto. 

 

For those who cannot tap the tech smarts that such sophisticated platforms have on offer, the only ray of hope for you is to have a long-term perspective. Remember that it always works out in the long run, as they say.

 

Do More than Just Hold

If the prospect of holding doesn’t seem to be exciting to you, thankfully, there is more to do than just hold.

 

Staking is one. Exchanges like Coinbase, Kraken allow users to stake, which is essentially locking away their coins on a blockchain. Much akin to putting away your money in a bank saving account in exchange for interest, staking lets you earn easy returns on your coins. There's a vesting period, though, during which your coins will be locked up, and you won't be able to trade them even if you want to. So, before you go running to an exchange to stake your coins, there are things you need to mull over. First of all, not all cryptocurrencies support staking. Bitcoin, for one, doesn’t. Next, figure out where your coins will be safe and secure, free from the growing threat of cyberattack. Finally, make sure you stake whatever you can afford to lose, as there's always a counterparty risk with staking.

 

If you truly believe in the potential of an asset, why not stake some of it to earn some passive income rather than let it simply sit there in your wallet collecting dust.

 

Just like staking, Dollar-Cost Averaging (DCA) is also worth considering if you want to do well in the long term. It is a time-tested strategy for building your portfolio of assets at your own pace, but it may require you to be actively involved.

 

For those wondering what DCA means, it is a proven investment strategy where you keep accumulating an asset at different prices in order to bring down the average cost of buying. This is how it works: set aside a fixed amount to be invested, break it down into small chunks, and keep investing in the market at regular intervals- no matter whether it is down or up.

 

Although agnostic to bull and bear markets, this strategy is much more potent and effective in a bear market when prices are on a decline; and that means you end up buying more shares than you would in a bull market. And, when the market rebounds, your investment will have grown substantially. 

 

This course correction, although deep, is normal for a cryptocurrency like Bitcoin. You never know. Despite the flash crash, you might still see Bitcoin ending the year on a high outdoing it's all-time high.

 

So, if you have some spare cash to dispense with, take that and put it to work in the crypto market. You won't be disappointed.