Crypto-currencies gained momentum in 2021 with the bitcoin price explosion. By reaching an all-time high ($ 68,000), it provided a positive insight into a sector at which everyone is at risk. However, while rich in gains, crypto is highly risky due to constant chart movements. So how do you overcome bitcoin volatility?
Buying and holding bitcoins to overcome volatility?
Crypto investing requires knowledge and preparation. Like many industries, crypto has full advantages, but also risks. When an investor decides to enter this field, he must know what to expect and prepare alternatives in case the tide turns. Among cryptos, BTC largely stands out from others and attracts many people.
However, bitcoin volatility is a significant factor. In fact, if some investors consider it a permanent risk, others, on the contrary, think it is a blessing. If you may lose a lot of money due to the fall in price, promotion may also make progress for you. Volatility is therefore a two-edged sword. So, finding the best solution to deal with this phenomenon can increase your investment and multiply your earnings.
One of the favorable options to overcome bitcoin volatility is to buy and hold tokens. Some people start out not knowing exactly what it is. Knowing when to buy and when to sell can quickly benefit from volatility. Therefore, you can buy when the price is low, keep your signals and sell them when the indicators turn green.
However, take into account that this method is a long-term investment that can bring in a lot of money. A hasty investment can lead to many losses. This is often the case for novices who panic as soon as the market moves. The latter has a habit of selling as soon as the market presents a bearish price to avoid losses if the fall continues. At this point, all you have to do is buy your BTC, keep them in your wallet and wait for the right time.
What about portfolio diversification?
As the saying goes, you do not put all your eggs in one basket and that also applies to crypto investing. Any good trader knows that crypto assets are unstable. Therefore, we must anticipate everything and prepare solutions for dark times. Keeping signs can be a good idea. However, bitcoin volatility can crash prices and mess up any estimates.
Like all crypto assets, BTC is sensitive to certain events. So portfolio diversification can be another option to multiply your gains. We are not asking for it, but the price of the flagship crypto can undergo certain detrimental changes for itself and your investment. Owning other assets in your portfolio can be profitable if it is significantly reduced.
However, go for high market cap crypto with high earning potential. To better mitigate the negative effects of bitcoin, investing in betting cryptocurrencies is the most recommended solution. Remember that the price of a crypto is sometimes influenced by the price of a BTC. As a result, small cap assets are likely to be further damaged in the event of a market downturn.
Bitcoin volatility is an eternal trap when investing in crypto. Since the explosion of crypto assets, more and more people see only the positive side of the sector. However, the recent collapse in the markets is a reminder of the risks associated with cryptocurrencies. So, it is possible to earn a lot of money if you avoid the movements of the crypto flagship. However, heed the warnings and be patient. Any hasty investment can increase the losses!
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The world is changing and adaptation is the best weapon to survive in this turbulent universe. As a crypto community manager at the base, I am interested in everything directly or indirectly related to the blockchain and its derivatives. To share my experience and share an interesting field for me, there is nothing better than writing informative and reassuring articles at the same time.