[vc_row full_width=”stretch_row_content” equal_height=”yes” content_placement=”middle”][vc_column width=”1/6″ css=”.vc_custom_1632304143278{padding-top: 0px !important;padding-right: 0px !important;padding-bottom: 0px !important;padding-left: 0px !important;}”][/vc_column][vc_column css_animation=”none” width=”2/3″ css=”.vc_custom_1632306814843{margin-top: 10px !important;margin-right: 20px !important;margin-bottom: 10px !important;margin-left: 20px !important;background-position: center !important;background-repeat: no-repeat !important;background-size: cover !important;}”][vc_row_inner equal_height=”yes” content_placement=”middle”][vc_column_inner width=”1/2″][vc_column_text]
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[wpdts-month-name-short] [wpdts-day], [rt_reading_time postfix=”mins” postfix_singular=”minute”] read
[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/2″][vc_raw_html]JTVCU2Fzc3lfU29jaWFsX1NoYXJlJTVE[/vc_raw_html][/vc_column_inner][/vc_row_inner][/vc_column][vc_column width=”1/6″][/vc_column][/vc_row][vc_row][vc_column][vc_row_inner][vc_column_inner width=”1/6″][/vc_column_inner][vc_column_inner width=”2/3″][vc_column_text]Cryptocurrency investing is one of the trendiest phenomena right now, but for newbies, sharp changes may be problematic. Crypto investments have proved to be a popular success, as a broader range of cryptocurrency investors continues to investigate, and possibly even prefer, the possibilities in this rapidly expanding field.
However, the volatile nature of crypto investing has not altered. Volatility is a prominent presence in any sort of crypto investing, from digital currency pricing to blockchain stocks with company initiatives in the field, and even a recently listed exchange-traded fund (ETF) focused on bringing newbies to the industry.
You’ve dabbled with the world of cryptocurrency. You’re aware that, in general, the volatility of this sort of asset is larger than that of most others. You’ve noticed that the tendency of rising volatility during the COVID epidemic is much more pronounced in the cryptocurrency world.
According to recent sources, the 30-day volatility of Bitcoin prices soared to 200% in April 2020, with overall volatility of 68% during the previous year. The S&P 500, by comparison, experienced average volatility in the low to mid-terms over the previous year.
Bitcoin, for example, went from a high of just under $12,000 to a low of just above $10,000 in the time it took to write this post, a roughly 17% loss in a week. It would have been a nice payoff for cryptocurrency investors if they had shortened it during this period.[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/6″][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row full_width=”stretch_row_content” gap=”1″ equal_height=”yes” content_placement=”middle”][vc_column css=”.vc_custom_1632304143278{padding-top: 0px !important;padding-right: 0px !important;padding-bottom: 0px !important;padding-left: 0px !important;}”][vc_row_inner][vc_column_inner width=”1/6″][/vc_column_inner][vc_column_inner width=”2/3″][vc_custom_heading text=”Managing Cryptocurrency Volatility” font_container=”tag:h3|text_align:left”][vc_column_text]This amount of unpredictability isn’t always a negative thing. Uncertainty is a part of the asset universe that can be managed with good investing techniques and management, as any experienced investor will tell you. There are a few basic principles to follow when dealing with volatility in any investment vehicle. It’s important to avoid recklessness or underconfidence. The following tactics will be as well.
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BYPASS BEING EMOTIONAL
You’ll almost certainly be inundated by people attempting to persuade you of the emotional value of a specific investment. A typical tactic is to try to instil fear of missing out (FOMO). A big number of offers suggest that a certain currency is the future of Bitcoin, assuring that you may walk away with tens of thousands of dollars for the purchase of a few dollars.
In the bitcoin world, emotionality is pervasive, and you should avoid it. The gleaming bauble that the relatively tiny cadre of Bitcoin billionaires symbolizes has captured the attention of many journalists and onlookers. This is an excellent illustration of the type of emotionally driven thinking that can lead to bad decision-making by chasing the best-case scenario rather than paying attention to the indications that support an acquisition.
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DON’T TIME THE MARKET AT ALL
Stepping into the market at the right moment might be beneficial, but timing cryptocurrencies is clearly more difficult than timing traditional assets. Your best bet is to approach with a flexible yet non-emotional demeanour.
Timing the market will become almost difficult in a short period of time. Bitcoin is similar to practically every other asset in that, while the fundamentals may be understood, shifting views about it can either support or depress values. To deal with bitcoin volatility, you’ll need to have your money ready to react to unexpected market declines and be willing to hold for extended periods of time.
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REALIZE WHEN TO HOLD
The elevated levels of volatility in cryptocurrencies are neither a flaw nor a feature. They’re merely a part of the natural world. Holding on and being cool when a cryptocurrency is experiencing a particularly large fluctuation will save you money. Because of the volatility of cryptocurrencies, market corrections may be swift and severe.
Price fluctuations are inevitable when investing in cryptocurrencies, and understanding when to hold your buy and trust your analysis rather than reacting emotionally to a price shift is vital to success.
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BETTER TO DIVERSIFY
Diversification implies that unless you’re more interested in gambling than investing, you shouldn’t put all of your money into bitcoin. As a result, the ideal strategy for diversification is to invest only a small portion of your bigger portfolio in cryptocurrencies.
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BOUND YOUR EXPOSURE
If cryptocurrencies are a component of your overall investment plan, it may make sense to diversify your exposure within the cryptocurrency field by investing in a few different coins, preferably ones with low correlation in their price movements.
In terms of how their price swings correspond with one another, Bitcoin and Ethereum have been likened to gold and silver. Certain cryptocurrency exchanges have already created and offered futures on the coins they trade. These futures allow you to place more complicated wagers on the future value of your chosen cryptocurrency.[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/6″][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row][vc_column][vc_row_inner][vc_column_inner width=”1/6″][/vc_column_inner][vc_column_inner width=”2/3″][vc_custom_heading text=”To Sum Up” font_container=”tag:h3|text_align:left”][vc_column_text]The bottom line is that cryptocurrencies are an investment vehicle that demands a higher degree of technical knowledge and, most likely, extra care, but they generally follow the same rules as any other investment. With increased volatility across various investment classes, managing the emotionality of this form of investing can be tough.
The ideal way for cryptocurrency investors to invest in cryptocurrencies is to maintain a good level of fundamentals while also learning about the nuances of these emerging marketplaces. They’ll be quite volatile, but with the right planning and technique, you can use that to your advantage.[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/6″][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row][vc_column][vc_row_inner][vc_column_inner][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row]
