How to Survive the Volatility of the Crypto Market

Mynah Marie

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Disclaimer: The author’s opinions are their own and do not constitute financial advice in any way whatsoever. Nothing published by the author constitutes an investment recommendation, nor should any data or content published by the author be relied upon for any investment activities.

Even though cryptocurrencies have seen a huge increase in adoption in the last few years, there are still many controversies around the idea of investing in crypto. Some say most people investing in crypto lose money, while others say people not investing in crypto are missing the opportunity of a lifetime.

It's true that the crypto market is incredibly volatile — we only have to look at the current market crash to see this. So should you, or should you not invest? And if you do invest, how can you maximize your chances of making good choices?

Here's a golden rule to follow that could potentially guide you in your future decisions:

Don't invest in crypto without a strong motivation to understand the technology behind it. And if you're wondering which projects to invest in, only invest in projects you can soundly see use-cases for in the long term.

It sounds obvious but too many people invest in crypto as if it's some kind of get-rich-quick scheme. These people make investment decisions based on word of mouth, or on the opinions of crypto influencers. They are usually the ones buying high because of FOMO and panic selling when markets go low.

Not only that, but many people invest in crypto without having any kind of interest in the technology. It's hard to clearly see the use cases of a particular project without understanding the technology behind it to some level. And since blockchain and crypto are confusing topics, it's important to have some interest in technology to comfortably keep up with news and updates in the crypto space.

Investing in projects with strong use cases in the future is the fundamental pillar to keeping a cool head when facing a market crash.

People who invested in projects with a clear understanding of the underlying technology and the future use case of this technology are usually much calmer during market shifts. They know the technology is still early and that these kinds of market movements won't matter in the long run.

In a recent interview with Yahoo News, Kevin O'Leary shared some of his thoughts on crypto investing and declared that he spends about 40% of his day tracking cryptocurrencies now. That's a long time to spend educating yourself on something if you're not passionate about it to some extent.

"The reason you should think about it is this [...] If you invest in Microsoft and google [...], what is the core of the thing you're investing in? It's basically software. Bitcoin is not a coin, it's software. The blockchain is software, Ethereum is software [...]."
"Bitcoin is having one of its first starts ever but you got to get used to it [...]. I like growth, and I understand it's going to be volatile. Days like this, I remind myself that I've seen this movie before. Go back 17 years on Amazon, which I owned for almost that entire stretch, we had 30, 40, 50% corrections each year! And yet, look where you end up today."

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I write. I code. I make music. Also, I'm passionate about crypto.

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