Last year proved to be a massive growth year for the crypto market, and as a new investor you were rewarded often with large gains on your investments. But with the recent “crash” you might be asking yourself what happened to easy markets and Bitcoin highs of 2021? It can be pretty hard to stay calm and not rush to sell and get what you have left of your money, but it’s a lot easier if you have a plan for your investments.
Here are 4 quick tips for handling volatility:
Keep emotions out of it – FOMO is real. It’s okay to feel anxious about your investments and choices with your money. Being emotional can lead to buying at peaks and selling at lows.
Plan ahead – Consider your goals. Buying and holding isn’t for every asset just as much as day trading isn’t for every asset. Did you buy with the intention of holding for months? Years? If you’re holding for a long period of time then sit back and relax. On the other hand if you plan on day trading, you’ll need to put in hours of homework. For most people, the safer play is finding assets that you will hold for a while and gain steady growth.
Try dollar-cost averaging – Probably one of the best strategies to overcome volatility. Dollar-cost averaging involves buying smaller amounts of crypto every week or month no matter the highs or lows. This helps investors buy down their average cost per coin over a year or so and stabilize their investment.
Trade within your limits – Never put in more than you can afford. It’s all to easy to “buy the dip” and yolo your money into the next exciting asset. The hype is real so make sure you can financially afford investing in a particular asset no matter how confident you are about its future performance.