The crypto winter has seen crypto prices fall to new cycle lows and the recovery of the crypto market could take a year or more. So how can you continue to invest in this market?
Max Coupland, Head of CoinJournal, gave his 5 tips for thriving in the crypto winter, as the bear market continues to affect businesses in the crypto space:
« 1 – Shelter in winterproof assets
The crypto world is very volatile, so nothing is really secure. However, some large-cap cryptocurrencies have repeatedly demonstrated the ability to hold their value when volumes drop, such as BTC or ETH. Their resilience and ability to bounce back suggests they are more likely to thrive even during the darkest times.
2 – Prepare for quality projects
Crypto winter is not universally seen as a terrible thing, periods of slow growth are useful for weeding out weak projects, being aware of rising crypto with levels of sustainability you can actually buy into, and giving developers time to establish high-quality new projects that investors can adopt.
3 – Budget responsibly and be aware of market volatility
Any investment you make could suddenly lose value, so it’s important never to invest more than you can afford to lose. Make sure you leave enough money to live comfortably when deciding how much to invest, and don’t go over your investment budget without doing a thorough reassessment. If you want to be able to ride out bear markets and wait for the right time to sell, you may need to hold onto your investment for years and be prepared to see its value fall.
4 – … However, don’t be afraid to buy dips.
If bitcoin’s cyclical structure continues, further phases of price growth and accumulation will be seen following the coin’s next halving event in 2024, but this will depend on whether BTC maintains its market dominance and adherence to previous trends, which could change quickly. This means that current prices could be presented as long-term discounts. Of course, trying to catch a knife or forecast a dip is never a good idea, but buying dips coin by coin can be an amazing strategy for accumulating crypto if you think a market bounce is in the works. road.
5 – Keep an eye on Bitcoin as the stronger dollar may help its value
The fluctuation of the US dollar affects Bitcoin. Large flows of money have flowed into the United States during the recent global economic uncertainty, pushing the value of the dollar up, which will most certainly boost the world’s largest cryptocurrency. Generally speaking, the strength of the dollar has a strong correlation with the federal funds rate. With Fed members still planning to raise rates later this year, a significant number of investors believe the Fed will need to pivot sooner than the market thinks as the economy heads into a deeper recession. serious that will not allow the Fed to be so restrictive with policy. Even if that happens, the dollar could remain strong if it continues to be a safe haven for investors as other European economies suffer, so watch geopolitical developments. Nevertheless, with the dollar so hot right now, there is a possibility that it will cool down in the near future, which could benefit Bitcoin.