The crypto market has constantly faced huge turbulence and is still facing. The huge plunge took all digital coins to a low and made all investors nervous.
Bitcoin and Ether did a comeback after the crash. But volatility is still there in the entire market. This crash triggered huge selling in the market as investors started to offload all their holding and reduce losses in the middle of this current uncertainty.
Many people also expressed their desire of buying the dip with the hope for some rebound in the coming future.
Analysts said that is not a great time of investing in crypto, considering the huge volatility that battered valuations now. But few analysts believe that buying the dip is not a bad idea considering the rapid rebound. You can visit bitcointrader2.com also for more information.
People looking to make crypto investments must be prepared to face huge swings because they are a risky asset one will be investing in now.
Volatility of the crypto market
- Those who kept on investing in crypto for many years for the huge gains or losses are never something new.
- In December 2017, Bitcoin recorded a past high record of almost $20000.
- However, by December 2018, it traded below $3500.
- With the acceptance of Bitcoin, the upward and downward moves are breathtaking.
- Considering long–term views, such moves are in perspective.
- In April, Bitcoin may be down 50%, but through May, it was up 25 % from the lows and up 100 % now.
- So if you are a seasoned investor, such lower prices are nothing.
- Drop in Bitcoin value is seen as an opportunity for buying.
Get an idea of all risks before investing in crypto
- During the time of crash in the crypto market, some people think that is the best time to move in and purchase low.
- But you must be sure before you decide to make Bitcoin and other crypto investments.
- You need to understand if an 85-95 % downwards move in your holding will be creating a huge problem, or you have to sell it.
- If it is so, then do not invest.
- Assets come with highs and lows.
- Crypto has a lot of highs and lows due to the huge hype and also because people are not aware of what it is actually.
- People are seen to buy it as they heard someone else to talk regarding it.
- Such unmeasured risks are not worth taking.
- Before investing, be aware of what amount you can afford losing as investments include inherent risks.
- Wisely select your assets and have strong and proper reasons for investing that should never be swayed even during drops in the market.
Manage your investment plan
- Avoid buying large amounts in a single shot.
- Buying a whole bunch one time it will be psychologically challenging if there is a fall in price.
- So it is suggested that you must consider a normal investment strategy of dollar-cost averaging.
- Purchase small amount each month.
- Keep on repeating it as the price moves up or falls down compared to purchasing all in a single cost when you need to psychologically deal for the predictable future.
- Experts are often seen to say that a single asset such as a certain coin or a stock of a company must be at the top of a portfolio of bonds, stocks or mutual funds.
- You will take a huge risk if cryptocurrency is the only asset you have invested in.
Conclusion
It completely depends on the individual if he is ready to take such a risk. If he is in search of a sage and long-term option for investment, crypto is not the option considering its risk factors and high volatility. But if you are confident enough to take the risk with the proper financial backing of investing in this digital currency, it will be a perfect investment choice. Your returns will be better than the conventional investments if you are aware of the everyday trends. But be ready to face extreme volatility often. Be patient and do not sell the investments during rising uncertainty. People who come with interests in cryptocurrency investments should be ready to diversify their portfolio and look for options such as Ethereum, which is predicted to be a great virtual coin in the crypto market.
