Top Three Things to Do During this Crypto Winter
In 2021, Bitcoin and other cryptocurrencies rose phenomenally, thus maximizing investors’ profitability. No one knew what 2022 would hold, and we are now witnessing those same crypto assets plummet. Sadly, crypto winter is here and financial market experts don’t think it’s going away anytime soon. Many traders and investors are worried about the way forward. However, the best thing you can do right now is to have a plan for weathering the season. The market has become unpredictable, thus shunning away newbies wanting to try their luck investing in cryptocurrencies.
Overall, getting started trading or investing in cryptocurrency is not easy, especially now that economic conditions drastically affect the market. Newbies must move cautiously and avoid making decisions based on emotions and peer pressure. Fortunately, there are some things you can do during the crypto winter which you could ultimately benefit from. Keep reading to discover the top three tips on handling this crypto winter. We hope this will help you have a survival mindset as you wait for the bull run to begin!
Causes of Crypto Winter
Before we get into the main agenda, first we should understand what drives the endless crypto winter. Industry financial experts believe that the major sell-off investors are currently carrying out is the primary cause of the crisis, due to increasing interest rates. The Ukraine-Russia war is another factor contributing to crypto winter since it has caused economic uncertainty and high inflation globally. In addition, the collapse of Celsius and Terra Luna has left the economy with a huge gap to fill, which therefore affects the value of cryptocurrencies.
Remember, crypto winter is a version of the bear market whereby the prices of cryptocurrencies drop by over 20% and remain low for a certain period. The last crypto winter occurred in 2018, during which we witnessed the price of Bitcoin fall by as much as 80%. Therefore, if you’re new to the market, note that this is not the first crypto winter we’ve seen, and it won’t be the last either. So if you’re planning to take a plunge into the crypto ocean, be prepared for these types of challenges.
Besides getting rid of unstable companies in the industry, the crypto winter has left many individuals without jobs. Many companies are laying off their workers to save on funds and keep afloat during this period. However, other companies like Binance are hiring since they believe they can afford to pay more workers during the crypto winter crisis. Besides, these companies want to build a stable workforce and become a force to reckon with once the crypto winter is over!
Additionally, investors with long-term positions are tossing and turning as they seemingly witness their investments go down the drain. On the other hand, newbies see potential and want to invest while prices are still low. But is this the best time to put your money into the crypto market? Well, the crypto market is unpredictable, and the best way to find out is to carry out a thorough market analysis to identify suitable investment options.
How to Survive the Crypto Winter
Investors in cryptocurrency are now wondering what to do with their investments. On the other hand, newbies are also wondering whether this is the right time to invest. As Binance CEO Changpeng Zhao says, investors should look at the brighter side of crypto winter to benefit from it, since they cannot control the ongoing crisis. But then, what should you do during crypto winter? Here are the top three strategies to survive.
1. Invest in Yourself
If you believe this isn’t the best time to invest in cryptocurrency, don’t. Instead, use this time to prepare for the bull market by equipping yourself with proper knowledge regarding the cryptocurrency market. For instance, you can learn how to choose the best asset for investment and analyze its historical prices for solid strategies. Since the best trading platform will maximize your profitability, learn how to select a reliable platform with adequate trading resources.
Fortunately, you can use online learning resources such as website blogs and YouTube channels to improve your skill level. Most cryptocurrency brokers also have excellent learning materials, including articles, guides, Ebooks, webinars, seminars, etc. If you are already a member, take advantage of its demo account to test your skill level and work on improving yourself as you wait for crypto spring to set in.
While learning about the crypto market and its assets, make sure you evaluate your portfolio and select the best assets with profit potential. Simply put, take your time off trading or investing to reflect and make the best-unbiased decisions. Remember, you won’t have enough time once the bull run begins since you will be more emotionally invested in making moves before crypto assets prices increase further.
Overall, this crypto winter is the best period to identify your strength and weakness. You will end up with a better understanding of whether you should venture into physical crypto assets, invest in crypto stocks, or trade them as derivatives such as CFDs. On top of that, you should also understand the risks of derivatives trading since while many traders are earning huge profits from it, others are counting losses.
2. Find the Best Crypto Trading Platform
The best cryptocurrency trading platform is challenging to find, considering there are a gazillion options out there to choose from. You must conduct thorough market research by testing them to analyze their performance and select a suitable one. For instance, if you want a platform that connects you directly with other traders, consider marketplaces like LocalBitcoins.
LocalBitcoins marketplace is not only user-friendly, but also trusted by over 8 million users across more than 190 countries globally. Additionally, the marketplace offers excellent learning resources like webinars, guides, and a FAQ section for answers to basic crypto trading and investing questions.
Note that the best payment method is essential when transacting in the dynamic crypto market. LocalBitcoins support over 150 payment methods globally, giving traders from all regions the opportunity to enjoy the platform and have the best experience possible. Since Bitcoin is an asset that has been hit the most, you can buy Bitcoin with PayPal on LocalBitcoins since it is accepted globally and encourages flexibility among the participating investors. Additionally, you can buy Bitcoin with a credit card and enjoy transacting using your preferred fiat currency, including USD, EUR, NGN, GBP, INR, RUB, etc.
Newbies require an easy-to-use trading or investment platform that secures their funds and allows them to enjoy their experience. You can identify one suitable for your needs by considering security and regulation, trading charges, platform performance, availability of your preferred asset, support service reliability, and more.
3. Budget
Proceed with caution if you decide to venture into the crypto winter market. While prices might be low and seem like the best time to invest, remember that the crypto market is volatile and unpredictable. Most prominent financial experts believe the crisis might last for the next four years. Therefore, have a budget and don’t be tempted to invest with money you aren’t comfortable losing.
When budgeting, you should not only look into cryptocurrency prices but also factor in brokerage charges like commissions, spreads, inactivity fees, etc. No wonder platforms like LocalBitcoins take the lead, they don’t charge any brokerage fees! You can conduct business directly with other traders using the money you can afford.
Furthermore, consider transaction charges on your payment methods to ensure they fit your budget. For instance, if you want to buy Bitcoin with PayPal, you might incur transaction costs from the broker and PayPal. Understanding these fees and planning for them will help you make the best decisions and have an excellent trading or investment experience.
Many traders believe they incur high charges when buying Bitcoin with a credit card and PayPal. On the brighter side, these methods are highly secured, and you don’t even need to worry about reversed transactions.
If you’re buying cryptocurrencies to store and sell later for a profit, find an affordable crypto wallet to secure your asset. We suggest you consider cold/hardware wallets since they are offline storage kept away from hackers’ reach. The last thing you want during the ongoing crisis is to have your assets stolen, leaving you with nothing but losses! The good news is that LocalBitcoins has an in-built crypto wallet for storing your assets. It also recommends other wallets to consider based on your preference.
Verdict
Many traders consider the crypto winter period boring and depressing. You probably love the highly volatile markets where you have fun and make quick profits by taking short-term positions. As an investor, you should also see the positives in adverse situations and make the most out of them. With the three tips we mentioned above, the crypto winter period doesn’t have to be boring and frustrating.
One more thing to add to the three tips to help you during this crisis is considering staking more coins. Trading on FOMO during a bull run can be one of the worst decisions since you invest under emotions. You can use this crypto winter period to stack your preferred cryptocurrencies and reap good profits once crypto spring comes. We can’t wait to wake up and smell the flowers!
En español: https://es.blog.localbitcoins.com/las-tres-mejores-decisiones-durante-el-criptoinvierno
