Well markets have crashed. As the old adage goes “What goes up. Must come down”. That’s what markets do. Any asset class (stocks, gold, silver, property) does that. So if anyone tells you, “See. I told you. Crypto is a scam”, just end your association with them. Or direct them here.
I know your patience levels are pretty low on a day like this. So let’s get to the crux here.
1. Stay away or reduce time in front of the screen
How many times in a day do you check your portfolio on Coingecko or the likes? How many times do you open Blockfolio? I do it loads of times. I’m guessing you’re up there too. STOP doing that. May be delete Blockfolio (temporarily. Your portfolio stays once you reinstall it). Come back to it in a couple of days or more. There’s not much you can do anyways. You don’t know when it will end (the downfall). It will though (I personally think this bull run is not over. But DYOR. This is not doomsday. This is the market doing what it ought to do). Really no use panicking unless of course you’ve leveraged yourself during the last few days or you’ve filled your portfolio with a bunch of crappy coins. Again always invest an amount that does not threaten to you losing your pants.
If you have it in you, stay of social media (Twitter especially). I can’t. Buy if you can, you’ll be good on such day. Depends also on what you’re following. I follow this guy called Crypto Mobster among a few others. But you check what or who works with you.
2. Down moves are a sign of a healthy market
Again, if you expect something to keep moving unidirectionally, you should not be in this market. Or investing in general. Bitcoin ran up from a level of $28000 on 1st January to around a high of over $58000 on the 21st of Feb. That’s over 100% in less than two months. How many assets do that? Yes its easy to get swayed when all your hearing is “100K is coming”, “Don’t sell Bitcoin before $1 million”. It may go there. It may not. But just remember ups and downs are part of a market. “Down-days” only help let an asset find levels for strong up moves. Insane “up-days” help the market find levels for strong down moves. That’s how it it. Talking technically, buy around supports. Sell / book profits around resistances. DO NOT TRY TIMING the top of the bottom.
3. Act for yourself. You know best. Trust yourself (that’s how you will learn)
This may sound vague. But here’s what I’m suggesting. I am using the dip here to add in small positions to my holdings. I like projects like NANO, QUANT, ZILLIQA, PARSIQ to name a few. I’m willing to hold these even if they fall further. I will not sell these. Why cause I like what they are doing. Secondly, I do not think this market run up is over. I think it’s going to move up. That’s what I’m doing. Does not mean you ape or that I’m advocating you buy here. Think and decide for yourself. Here’s a quick checklist
- Am I okay having my cash locked in these coins for months?
- Have I invested all I possibly can (to avoid stress and avoid living hand to mouth)?
- If you staggered your investments wanting to buy on dips. Do that.
So it’s basically a very personal thing. Not influencer or expert knows your situation better than yourself. Trust yourself here. I’m not saying ignore them. Listen to them. Hear them out. Take what makes sense. I do that. But act based on your situation. If, for example, you’d invested $1000. That’s now $600. There’s a payment you need to make next week of $500. What should you do? I would book my losses here despite losing the $400. But I would have known about the upcoming payment when I got it. The $600 can go down to $200. Then what? I’ll be asking friends and family to help me out here. I don’t want that. Someone else may be fine doing that. So, again. This is your choice to make.
4. Use these days to remind yourself in the future to BOOK PROFITS
I recently did a post where I mentioned getting into Curate (XCUR) around 47 cents. Seeing that go up to $2.5 in a couple of days. Cashing out. There were calls of Curate moving to $10.I felt bad after selling for a few hours. But so be it. I multiplied my investment four or five times. That’s ok with me. You need to take profits. Else it’s only NOTIONAL wealth. Trust me I’ve seen my wealth grow notionally a few times earlier, only to see it eventually vanish. I have not been more disciplined with my investments than now. It’s a learning process. But you need the discipline. BOOK PROFITS. No one has been hurt by booking profits. Protect your capital. People may mock you for selling early and stuff. So be it.
As an asset class, crypto is way more volatile than a lot others. So you may well see 3-4 times of an investment in a day. Be smart. Book profits. I can’t stress this enough. Take out maybe 2x your capital. Rise the rest. So you’re secure and don’t need to spend sleepless and stressful nights and days.
5. Spend some time on your portfolio
Review what’s fallen the most. Why? If the overall market’s fallen 10%, why is this one coin I hold fallen 50%. Do some introspection on your portfolio. Decide what’s a core holding. What’s not. Decide how much of your portfolio are you willing to allocate to each of these in the future. There are 1000’s of cryptocurrencies and each will have an influencer who’s screaming “This is the next 100x”. You obviously cannot be in all. Also, a large majority of the coins are crap. Go back and see what happened to ICO’s from 2017-18. Decimated. A lot of them. Read and spend some time understanding what the project is. Do not invest based on just a tweet. You’re more likely to get burnt doing that. Your wallet.
Think. Are you a trader or an investor? Diversify in the future. Put all your eggs in the same basket and you’ll be no different from Humpty Dumpty.
Stay safe. Invest smart.
On a related note, did a poll yesterday on Twitter on what is everyone doing in this dip. Here are the results so far
Whatever you’re doing. Remember you’re not alone. Everyone is sailing in the same sea. It’s just the boats that may be different. The tide affects everyone.