Crypto Panic! Don't Sweat The Small Stuff
Author: Elle Miller
Cryptocurrency is not for the fainthearted – to say the least. The cryptoverse can be a scary place, full of uncertainty and volatility. If you’re a beginner, you might feel like you are walking on the edge of a cliff. There are probably a hundred and one ways things can go wrong when you’re investing in crypto.
So what can you do to stay calm?
You may be wondering how to take your mind off the latest news about Bitcoin or other cryptocurrencies. Here are some tips that might help:
1) Don't panic!
Don't let fear or anxiety control your life. This includes not panicking when prices fall or rise suddenly. Keep calm and carry on as normal. If you lose money in an investment, don't sell immediately — wait for a while and see if it recovers (or not). If you believe wholeheartedly in the project and there’s a sound reason it can survive the long run, stay. Gains and losses are not realized until you sell.
2) Focus on the basics
When there's so much uncertainty out there, it's easy to get caught up in technical analysis and other "tips" which may or may not work out in reality. Instead, focus on getting educated about fundamental aspects of cryptocurrency like its underlying technology and why it's valuable to buy now versus later (when it'll be more expensive). There are a few fundamentals that will always stay true no matter what season of the crypto cycle we’re on.
3) Know Your Risk Tolerance
One of the biggest mistakes people make when investing in cryptocurrencies is that they try to time their investments based on news headlines or other factors outside their control rather than taking calculated risks based on their risk tolerance level. You should always know what you’re willing to lose. One of the best strategies to combat this is dollar-cost averaging. When you’ve planned out your investment correctly, you should consider putting in small amounts over time to average out the highs and dips. Do not ever put your life savings into investments. Always, always just invest what you’re willing to lose.
"If you're going to panic, PANIC now!"
That's the rallying cry of the cryptocurrency community.
The idea is that if you make a bad investment, there's no way to recover from it. So you have to buy in at the bottom and ride out the storm until things go back to normal. The thing is, the best way to not panic is to do three things when first investing:
- Educate! Know yourself, your money, and the opportunity.
- Plan! If you are confident enough with your know-how, create an investment plan. If not, consider enlisting the help of experts that have grown portfolios themselves.
- Keep the conviction. If you know and trust what you got into, it’s only a matter of time before you can finally reap the rewards. True wealth doesn’t come from get-rich-quick schemes.
Check out this video from our CMO, Wassim Daboussi on Conviction:
Just remember all this panic you’re feeling right now. One day, when cryptocurrency is the norm and your investment has skyrocketed, you’ll remember why you got into this space in the first place. Those that believed would be rewarded but with great rewards come great risks.
Your job now is to understand why you’re exploring this space. If you want to discover more about the cryptoverse from experts, come join the community. Our team is here to answer any of your questions, share our journeys, and help you throughout your wealth journey.
Check out decryptingcrypto.com for free access!