Bitcoin Investors, Here’s the Four Options to Ride with in a Crypto Bear Market Winter
Almost decade since the introduction of the BTC, the crypto world has been a roller coaster for investors. It is especially after the Bull Run picked up steam towards the end of 2017. There have been vicissitudes like nothing ever seen before in a huge crypto market.
Just like a rollercoaster, after a high, there is always a scary but exhilarating drop. This has been so for crypto in 2018. Recent hype has been that there may be a bull run soon. However, nobody is sure when it will take place. Despite these, investors can use some strategies in the bear market. Here are the top four:
• Short Sell
Shorting is a situation where a trader backs the position that a given market will drop. If they are right, they can strike it rich. The biggest short took place in September 1992 when George Soros made a $1 billion profit after he bet against the British pound after it was dropped from the European Exchange Mechanism.
Shirting is enabled by Contracts for Difference also called derivatives. They will let the trader sell assets that he or she does not own. In essence, a short trade is executed once the borrowed asset is sold at its current market value. If the market drops, the value of a trader’s position will rise. The trader can then decide whether to buy the cheaper asset or make a huge profit.
HODL is a misspelling of the world hold but crypto users have chosen to stick with HODL. This is where a crypto trader holds on to crypto for the long haul. It means that even when things are looking bad, traders must not sell. The belief is that things will change once mass adoption arrives. Thus, they will make a large profit as long as they wait out the storm.
There are some benefits to HODLing and not just in the crypto world, as history has shown. A good example of HODL was in the mid-70s. This was when Ronald Wayne, the third Apple co-founder sold his 10 percent stake for just $800 to his two co-founders.
In April 2018, Apple had a market cap of $1 trillion. If Wayne had adopted the HODL way, he would be worth a cool $100 billion in Apple stock today.
• Keep Investing
When the value of crypto falls, many investors invest more. This commitment seems quite risky. However, these people believe in the long-term benefits of crypto. Despite the current bear market, many users on eToro are investing more in XRP, BTC, and other top crypto offered on eToro.
If you have gone all in with crypto but the bear market persists, you might want to consider investing in other asset classes. That way, you spread the overall risk in case the bear market lasts too long. On eToro, there are six assets classes. Thus, you might want to consider sending some of your funds into these asset classes as you wait for things to improve in the crypto world.