Crypto winter has seen crypto prices fall to new cycle lows and the crypto market recovery might take a year or more. So, how can you continue to invest within this market?
Max Coupland, Director of CoinJournal has given his 5 tips on thriving through crypto winter, as the bear market continues to affect businesses in the crypto space:
“1 – Take shelter in winter-proof assets
The world of crypto is very volatile, hence nothing is truly secure. However, some large-cap cryptocurrencies have repeatedly demonstrated their ability to hold their value when volumes fall, such as BTC or ETH. Their resilience and bouncebackability suggest that they’re more likely to thrive even during the darkest times.
2 – Prepare yourself for high-quality projects
Crypto winter is not universally seen as a terrible thing, times of slow growth are helpful for weeding out weak projects, being aware of up-and-coming crypto with levels of sustainability you can truly buy into and giving developers time to establish high-quality new projects that investors can embrace.
3 – Budget responsibly and be aware of market volatility
Any investment you make could suddenly crash in value, which is why it is important never to invest more than you can afford to lose. Make sure you leave yourself more than enough money to live comfortably when deciding how much to invest, and don’t exceed your investment budget without making a thorough reassessment. If you want to be able to ride out bear markets and wait for a good time to sell, you may need to hold onto your investments for years and be prepared to see its value tumble.
4 – …However, don’t be frightened to purchase any dips.
If bitcoin’s cyclical structure continues, further phases of growth and price accumulation will be witnessed following the coin’s next halving event in 2024—however, this is contingent on BTC maintaining its market dominance and adhering to previous trends, which may change swiftly. This means that current pricing might be presented as discounts in the long run. Of course, trying to catch a knife or forecast a bottom is never a smart idea, but buying into dips piece by piece might be an amazing strategy to accumulate crypto if you believe a market rebound is on the way.
5 – Keep an eye out for Bitcoin as the strengthening dollar can help its value
The fluctuation of the US dollar affects Bitcoin. Major flows of money have come into the U.S. during recent global economic uncertainty, driving up the value of the dollar, which most definitely will boost the world’s largest cryptocurrency. Generally speaking, the strength of the dollar has a strong correlation with the Fed funds rate. While Fed members still plan to increase rates later this year, a sizable number of investors feel the Fed will have to pivot sooner than the market believes because the economy is heading for a more severe recession that will not enable the Fed to be as restrictive with policy. Even if this occurs, the dollar may remain strong if it continues to be a safe haven for investors while other European economies suffer, so keep a watch on geopolitical developments. Nonetheless, with the dollar so hot right now, there is a potential it may cool off in the near future, which might benefit Bitcoin.”
