How to Invest in Crypto in Uncertain Times

Over the years, investors have faced incredible uncertainty. We dive into different investment methods to use during these tough times.

Over the years, investors have faced incredible uncertainty. War, plague, and economic depression are all topics that dominate the headlines. In today’s article, CoinMarketCap Alexandria looks at different investment methods to use in these difficult times.

Uncertainty and market corrections will test the nerves of many investors. After all, seeing your portfolio go down that low can be hard to stomach. The past few months have shown plenty of tests, with Bitcoin correcting as much as 75%. Even stock investors were hit hard, as the S&P 500 also rose a hair 25 percent.

There are a few golden rules to remember in these uncertain times. First, it’s okay to feel emotions and worries when the market feels unpredictable. However, you should be mindful of your emotions when making investment decisions. Don’t let fear or stress stop you from making solid investments.

Another key principle to remember is the benefit of diversity. A diversified portfolio will react less violently to market movements and grow more consistently over the long term. It is the long term that you should focus on at times like this. It’s impossible to predict what will happen next week, but you can be more confident that prices will be higher five or ten years from now.

Finally, managing your risks is crucial. Whether you use stop losses, manual overrides or only invest what you can afford to lose, you should take a default approach to risk. There is no set in stone approach here, it depends on your personal preferences. Investing in uncertain times is more about survival than immediate profit.
Let’s look at a few ways to make it in one piece over the next few months.

Zoom Out – Take a longer horizon.

Uncertain times don’t last forever. Even market corrections fail. While it may be tempting to sell your positions, it’s important to look to the future rather than the present. Market reforms may present an opportunity.

Rather than exiting your positions, uncertain times may be the perfect moment to look for investments to add to your portfolio. By staying invested, you are in a great position to make money in the years to come. In general, a good approach is to get rid of investments that look bad in the long run and replace them with investments that you expect to pay off better. For example, you can sell your LUNA for BNB, or your Snapchat stock for Apple.

With a longer horizon, you may also want to consider taking more time to buy into the market. Don’t worry about buying the exact bottom, just dollar cost averaging across the assets you want to buy. That way, you’ll gradually increase your exposure over time, minimizing your worries!

Of course, you should do your due diligence before buying into any market.

Zoom In – Trade Intraday

After investing your money in long-term investments, you will need to minimize the amount of portfolio focus. Just let it be and focus on other things. A great way to do this while also increasing your net worth is to trade in shorter time frames.

This may seem contradictory to the previous paragraph, but zooming in is another great way to reduce uncertainty. Inflation-related volatility is mostly centered around scheduled news events like CPI prints, so you can enjoy a cleaner price action when the dust settles.

The returns on high-frequency trading compound quickly and (if you’re successful) will give you even more money to put into the markets. There are many different guides available for technical analysis on and off CoinMarketCap Alexandria. Use these times to improve your skill set! Build your long-term portfolio and use a small portion of your funds for scalping.

Safe haven and recession-proof investments

In times of market turmoil, look for investment opportunities that will perform well in any scenario. Depending on who you ask, this will lead you to different types of investments.

An investor will tell you to buy gold or silver as perfect hedges against uncertainty. Other investors will tell you to buy treasury bills, hold cash or buy bonds. These types of investments are backed by the government, and most people consider them risk-free. However, with inflation sitting at around 8%, these investments will cost you electricity, as they typically yield lower returns than such inflation rates.

Seasoned crypto investors will tell you that this is the time to find under-the-radar gems and buy them at incredible discounts. Crypto Winter allows you to buy tokens at a “discount” of up to 98%. Your job as an investor is to find tokens that make it through the winter in one piece and ride to new all-time highs in the next cycle, and to avoid overly optimistic “discounts.” Don’t get caught up in things.

Finally, one can look to buy recession-proof stocks like Walmart, Costco, or McDonalds. These companies have proven their worth in any environment after decades. Investors look for companies that have demonstrated their ability to weather any economic storm and continue to grow even in the toughest of circumstances. Many of these companies pay dividends regardless of market conditions, which can offset potential downturns across the board.

Recession-free stocks may not deliver triple-digit annual returns, but investing in uncertain times is more about survival than making money.

Concluding thoughts

Overall, there are many ways to weather economic storms. You can choose to keep cash or go for home stocks. As always, there is no one-size-fits-all approach to the markets, and different investors will take different approaches and be successful. No matter your approach, it’s important that you do your due diligence, take your time and follow a risk management approach that fits your investment choices.

We wish you well as you navigate the coming months and look forward to simpler times once again.

Author’s Disclaimer: This article is based on my limited knowledge and experience. It is written for educational purposes. It should not be construed as advice in any way shape or form.

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