What to do when crypto is crashing
It can be a scary time for investors when the crypto market crashes. But it is important to remember that this is not the end of the world. Here are some tips on what to do when the crypto market crashes:
- Don't panic: Many investors make the mistake of selling all of their assets during a crash, but it’s important to remember that the market could rebound and you could miss out on profits.
- Buy the dip: The phrase "buy the dip" means buying assets after their prices crash. While this strategy can be a good opportunity to buy cheap, it's important not to buy simply because the price has dropped and you have a fear of missing out on a good bargain. Always do the research before investing.
- Hold long-term investments: Another thing you can do is to hold your coins and wait for the market to rebound. If you're bullish on cryptocurrency's long-term potential, this is the best you can do. Market downturns are unavoidable; however, if you believe in a long-term upward trend, short-term pain should not phase you.
- Diversify your portfolio: Diversification is key in any market, but it is especially important in the volatile world of cryptocurrency. If one cryptocurrency drops in value, the others may not be as affected. Therefore, you shouldn't put all your eggs in one basket.
- Don't invest more than you can afford to lose: This is perhaps the most important rule of all when it comes to investing in cryptocurrencies. Crashes can be unpredictable, so it is important to only invest money that you can afford to lose.
Finally, you should have cash reserves and invest in additional assets such as stocks, real estate, and other things. Simply put, the best way to protect your portfolio from taking a big hit is to diversify it.