The first thing that traders learn when entering the cryptomarket is buying Bitcoin, Litecoin, or Ethereum. Some of these beginners started trading crypto because of news about traders earning millions in the cryptomarket. Those stories of crypto millionaires really did happen, especially during the December bull run, which saw Bitcoin propel to its $20,000 all-time high.
However, trading strategies are starting to change. What worked before during the crazy bull run will not work now, as we are already experiencing a 3-month cryptomarket slump. The bears have taken over the bulls. During this time, can you guess who has the hedge against the market? Almost no one. For the most part, almost all retail investors are hurting right now. Arguably, there is no such thing as a crypto hedge fund as you do not have anything to hedge with. When Bitcoin goes down 20%, almost every other cryptocurrencies go down 20% or more.
Here lies the danger of betting into projects that advertise themselves as “the next Bitcoin” or “the next Ethereum.” They could be right. But the odds are, they are not.
The best strategy in the crypto space is to invest on the technology that you believe in, and hold on until the technology matures. The best trading strategy is still HODL.
Again, Bitcoin and all other cryptocurrencies are still on its discovery stage. All the potentials have not yet been fully realized. Investors and shareholders are still trying to figure out the best practical applications of the Blockchain. The market is still relatively immature compared to the stock market and other financial asset markets.
In the past years, Bitcoin has proven to be resilient despite the many major bear markets that happened. What’s happening now, this huge dip in price, is only proportional to the crazy bull run that almost propelled Bitcoin to the moon. This is not an unexpected event.
Still, the best thing to do is to hold on to your investments, which you personally believe in in terms of technological development.
During the bear markets, do what bears do—hibernate. Stay away from the charts. If your trading strategy is holding on to your investments, then just sit back, relax, and wait until this crypto storm is over. Do your research well, and HODL on!
