By Franklin Smith
- Investing and holding for a long can help dodge the ongoing meltdown.
- Cryptocurrency experts appear optimistic about market recovery.
- Diversification might minimize risks and massive losses.
Most existing and newcomer users look to purchase at discounts as many cryptocurrency investors contemplate the possibilities of their portfolios reshaping following the latest market turmoil.
The recent survey by GOBankingRates revealed that most individuals investing in digital coins, including BTC and Ether, are newbies, most of whom joined the game during the COVID pandemic.
However, that didn’t save them from Monday’s brutal crash, which sent Bitcoin under $24K. Garcia, a Miami-based 24-year trader, lost 7K from her $10K initial investment due to the Monday crash. She stated that the losses were expected but shocking. She told Bloomberg about being more diligent amid current market conditions.
Most investors cling to the new asset class due to the potential of the technology with prospects of changing the globe. Users trust the ongoing crash might bounce back soon.
Do Current Conditions Support the “Dip-Buying” Mantra?
Usually, the dip-buying principle emerges amid temporary price drops and possible recoveries with time. Dip buyers accumulate at discounted prices and enjoy profits when prices surge.
Nevertheless, the crypto market remains unpredictable and investing at any time, including dip-buying, might be risky. Though prices have chances to trigger rebounds, the downside remains plausible.
Coinrule co-founder Oleg Giberstein told Forbes that the current market turmoil emerged as the overall financial space remains weak. About dip-buying, Giberstein advised investors to invest ‘comfortable’ amounts on assets like Bitcoin or Ethereum and never worry about price movements for the coming two years.
Potential Faults to Avoid
One of the faults of online investors is the failure to diversify investments. Portfolio diversification helps minimizes risks when dealing with massively volatile assets. The game is minimizing risks to maximize returns.
Experts trust an attractive and diversified portfolio that includes crypto, stocks, commodities like gold and oil, and fixed income. The best thing is that some asset classes will always rebound quicker or decouple from deteriorating markets.
Timing the crypto space to buy assets can be daunting as you need to factor in many facets affecting price movements, and most individuals trust luck works than timing. Experts believe evaluating data from a few months can reveal a lucrative trading pattern. Remember, long-time investment goals remain the key.