Article contributed by CryptoCookied.
Stockphoto by Max Andrey
It’s a difficult time to be invested in crypto. There is so much going on in the world, and we’re all searching for some semblance of balance. We all are striving to improve our lives and hope the world improves in the process. Setbacks, losses, and downtimes can feel draining or hopeless.
How can we look up, when everything else is down?
Disclaimer: I am not sponsored or affiliated with any of the projects/companies mentioned in this article. This is not financial advice, the information in this article is for educational purposes only. Never invest what you can’t afford to lose. I disclaim any liability or loss incurred by any person who acts on the information, ideas, or strategies discussed in my articles. Do Your Own Research.
No Blind Positivity, or Hopeless Negativity
When things turn out in a negative way, people often default to two approaches. They either turn completely anti-crypto(or blame their investment), or they choose blind-positivity in the face of it. Either response is an emotional response, and when it comes to markets, they’re not a place where one should make decisions based on feelings and emotions.
The first step is to accept the current state of things. If your portfolio is down, accept that fact. If you’ve had a loss accept that loss. When one invests only what they can afford to lose this is the reality that someone has to come to terms with. If we accept the situation we can start focusing on ways to remedy it.
Rely on Fundamentals
If you have heard the terms “bear” and “bull”, these terms exist for a reason. It represents a mentality and a way of thinking where you, either way, chase an opportunity or protect what you have.
Often we do the bull part easily, but the bear part is the one that’s done less.
What does it mean to be bearish?
Even in a bull market, one can be bearish. It’s okay to realize an investment did not do well and to want out of it. Not everything we invest in will be successful, and that’s perfectly fine, it’s natural.
I break down my investments into their fundamentals. In a downturned market, I reevaluate what I’ve invested in and why I invested in it, and determine if its downfall is temporary, or permanent.
If I invested in a token, simply to get a quick return on it, but I don’t believe in the fundamentals of the value of that token. Then that is something that is okay for me to cash out and convert to stablecoin and stake, or farm until the market improves.
This is why I believe in holding my crypto portfolio in predominantly stablecoin over other coins. A 50% stablecoin and 50% market volatile tokens ratio means less risk of a portfolio losing more than 50% value.
Stablecoin: If one has to start over with a small amount, stablecoin staking is a painless process to start. There are several options in both Centralized and Decentralized crypto.
Network tokens: If you believe in the fundamentals of the network behind the token you’ve invested in and have done proper risk management on it, then looking for places to single-stake that token while waiting out the downturned market can be an option.
Hedge Fund and Yield Bearing “Node” investments: If an individual has already invested money into these, they have two options: cashout to stables, or compound. This is a personal decision, on one hand, cashing out can be necessary, but expect the selling pressure to continue to drive down the price on these types of investments when the market is down.
I personally, choose to leave my nodes collecting until it reaches a price point I am comfortable with cashing out. I do not add more money into my node investments during a downturned market, and I don’t panic-claim out the rewards. I accept that the project is down, and may or may not recover and make the choice to claim based on the dollar value instead.
I have always said this, and I will say it a thousand times over. The best investment you can make is in yourself. Anything external you invest in will have a risk. Relying solely on the crypto market alone places a person at the mercy of stress and difficult emotions when things are down. During this time I like to lean on my other skills and assets until the market is back up. I write down a plan for what I can do to recoup my losses in the market and outside of the market.
There’s an old saying: “don’t keep all your eggs in one basket”. The meaning behind this is that it’s important to have diversity even in investing. I personally choose to invest in crypto, metals, land, sellable-physical assets, and my own personal skill sets.
I do believe crypto will be fine, markets have their highs and lows, and cryptocurrency is now part of the financial ecosystem.
We as human beings are adaptable. We’re capable of growth and each of us has amazing potential inside of us to be resourceful. Believe in yourself, invest in yourself, and you’ll be banking on the one asset that will provide you the most upside.
Stay Safe and Stay Informed.
Article contributed by CryptoCookied.
Join Our Crypto Research Community on Discord: https://discord.gg/Anr6PgyRKb