How to invest in cryptocurrencies in an uncertain market environment?

“ Investors have been gripped by incredible uncertainty over the past few years. We took a deep dive into different investment approaches to use during these trying times.”

Investors have been plagued by incredible uncertainty over the past few years. Wars, pandemics, and economic collapse have all made headlines. In today’s article, CoinMarketCap Alexandria takes a deep dive into different investment methods to use during these trying times.

Uncertainty and market corrections will test the nerves of many investors. After all, watching your portfolio drop significantly can be unbearable. The past few months have been plenty of testing, with Bitcoin prices correcting by as much as 75%. Even stock investors have been hit hard, as the S&P 500 was also slashed by 25%.

There are some golden principles to remember during these uncertain times. First, it’s okay to feel emotional and anxious when the market feels unpredictable. However, you must keep your emotions in check when making investment decisions. Don’t let fear or stress keep you from making solid investments.

Another key principle to remember is the benefits of diversification. A diversified portfolio will react less violently to market swings and rise more steadily over the long term; in times like these, you should focus on the same long term. There's no way to predict what will happen next week, but you can be more confident that prices will be higher in five to ten years.

Finally, managing risk is critical. Whether you use stop-losses, manual expiration, or only invest what you can afford to lose, you must have a predetermined approach to risk. There is no one-size-fits-all approach here, it depends on your personal preferences. Investing in uncertain times is more about survival than quick profits.

Let’s dive into a few ways to make it one in the coming months.

Long-term vision

Times of uncertainty don’t last forever. Even market-wide corrections come to an end. While it may be tempting to sell your position, it’s important to focus on the future rather than the present. Market corrections may provide opportunities.

Rather than looking to close a position, look for investments to add to your portfolio during uncertain times. By staying invested, you will be in a good position to make money in the coming years. Generally speaking, a good approach is to get rid of investments that look bad even in the long run and replace them with investments that you expect to have better results. For example, you could sell your LUNA for BNB, or your Snapchat shares for Apple stock.

With a long-term view in mind, you may also want to consider buying into the market over a longer period of time. Instead of worrying about not being able to buy the exact bottom, simply dollar-cost average the assets you wish to purchase. This way, you will slowly increase your exposure over time while reducing your worries!

Of course, you should do proper research before buying into any market.

Intraday Trading

Once you have your money invested for the long term, you need to pay as little attention to your portfolio as possible. Just leave it at that and focus on other things. A great way to do this while growing your net worth is to trade the shorter time frames.

This may sound contradictory to the previous paragraph, but short-term trading is another great way to reduce uncertainty. Inflation-related volatility is mostly concentrated on scheduled news events such as CPI prints, so when the dust settles, you can enjoy fairly clean price action.

The rewards of high frequency trading compound quickly and (if you are successful) give you more money to put into the market. There are many different technical analysis guides available both inside and outside of CoinMarketCap Alexandria. Use this time to improve your skills! Build your long-term portfolio and use a small portion of your capital to profit.

Safe Haven and Recession Investing

During times of market turmoil, look for investment opportunities that perform well in all circumstances. Depending on your requirements, this will lead you to different types of investments.

One investor will tell you to buy gold or silver as the perfect hedge against uncertainty. Other investors will tell you to buy Treasuries, hold cash, or buy bonds. These types of investments are backed by the government and most people consider them risk-free. However, with inflation running around 8%, these investments will still make you lose purchasing power because they typically generate returns that are lower than such inflation rates.

Seasoned cryptocurrency investors will tell you that now is the time to seek out unknown gems and buy them at amazing discounts. Crypto winter allows you to buy tokens at “discounts” of up to 98%. Your job as an investor is to find tokens that will survive the winter together and join the ranks of all-time highs in the next cycle, rather than getting caught up in overly optimistic “discount” discussions.

Finally, one might consider buying recession-resistant stocks like Walmart, Costco, or McDonald's. Decade after decade, these companies have proven their worth in any environment. Investors look for companies that can weather any economic storm and continue to grow even in the worst conditions. Many of these companies pay dividends regardless of market conditions, which can make up for potential downturns across the board.

Recession-resistant stocks may not generate triple-digit annual returns, but investing during uncertain times is more about survival than making money.

at last

In summary, there are many ways to weather the economic storm. You can choose to hold cash or go all-in on family stocks. As always with the markets, there is no one-size-fits-all approach, and different investors will take different approaches and have success. Whatever approach you take, it is important to do your due diligence, take your time, and employ a risk management approach that is appropriate for your investment choices.

We wish you the best of luck in the coming months and look forward to simpler times again.