What should first-time investors do during the current crypto crash?
Since its inception the crypto market remains to be one of the most volatile and fluctuating marketplaces. Even though nowadays the crypto market continues to crash, there are still some investors that decided to enter the market. When it comes to investing in the crypto market,while you are a newcomer, there are many things that are worth taking into account. Let’s discuss this topic in more detail.
Do not fall for celebrities advertising crypto
It’s not news that celebrities nowadays are advertising numerous things. Crypto is no exception. Everything from websites to mobile apps has been advertised by well-known people in some form or another. They have the power to flourish or ruin a business based on the strength of their internet presence. It doesn’t matter what product they’re promoting, you need to be wary. After all, celebrities get compensated regardless of the outcome.
Celebrity marketers who promote virtual currencies to the general public have come under increased scrutiny in the wake of the recent drop in their value. Matt Damon and Larry David have appeared in a number of high-profile TV commercials for crypto platforms in the past year, promoting digital assets as a money making opportunity. The advertising was attacked by crypto-skeptics because of its association with well-known corporations with annual revenues of millions of dollars. As a result, we can say that there are several reasons why you should not trust only celebrities when it comes to trading or investing money in cryptos.
First of all, celebrities are not financial advisors. They do not look at the charts, using technical indicators or other tools in order to predict the future price movement in the crypto market. No one pays celebrities to provide financial advice; this may seem self-evident. Rather, they’re paid to advertise items, and in certain cases, those products are investments in the form of dividends or interest. Rather than listening to them, novice traders, who don’t have any experience in trading can benefit from automated services. Nowadays there are several AI-generated trading platforms, like Bitindex Prime which allows you to get the most out of your trading process. With the help of this trading platform, investors can analyze data in a very short period of time, get analysis about the markets, and trade without looking at charts 24/7.
Instead of listening to the celebs, follow the advice of reputable financial professionals and ensure that you fully grasp how bitcoin works and the fraud that accompanies it before making any decisions. Any investment comes with dangers, and you should educate yourself on these risks before moving forward with any choices.
Do not invest a lump sum amount
Another thing that is worth taking into consideration when you are a newbie and enter the crashing crypto market is to avoid investing a big sum of money. When the marketplace struggles, even though at first sight it might be appealing to investors to buy a big amount of digital assets, it can lead to losses. Crypto specialists advise investors to avoid making “all-in” bets while making investment decisions. Jake Yocom-Piatt, the co-founder of the cryptocurrency Decred, advises against purchasing big sums of cryptocurrencies all at once. “When you purchase a lot at once and the price goes down, it’s quite tough for individuals mentally.”
Instead of investing too much money in crypto, when the market crashes, it’s important to adopt a systematic investment plan. With the help of this approach, you can easily manage how much and where to invest your money. When it comes to investing in cryptocurrencies, you may purchase a small amount each month and continue doing so as the price rises or falls, rather than purchasing it all at once and dealing with the psychological consequences for the rest of your life.
Don’t panic with the current price crash
Every sector of the economy, from cryptocurrency to equities and commodities, goes through ups and downs.
It’s much easier to avoid the negative feedback loop if you stay cool and preserve your perspective. In a financial crisis, investors who remain calm and reassuring are in a great position to succeed. If you sell during a collapse, you’ll lose out on any future gains.
In the past, Bitcoin has seen numerous cycles, and each time it has recovered with a fury. Throughout reality, every single person who has invested for four years or longer has seen their money increase.
Fortunately, market breakdowns occur on average once a year and last between three and four months. Historically, a market collapse has resulted in a 13 percent loss on average, with a four-month recovery time. For investors with a long-term perspective, a market crisis might be nothing more than a blip on the radar. To be clear, no two situations are the same, and no one can predict when the markets will come around with certainty. However, it should be stated that when you start investing, whether it is crypto, Forex, commodity market, or any other, one of the main things is to remain rational and don’t start trading emotionally.