A crash in the cryptocurrency market is inevitable. Look back at the brief history of cryptocurrencies and you will find a market of incredible spikes in value followed by significant downturns and often stagnation. That’s the high risk game played by everyone who invests in cryptocurrencies. Here are 4 rules to survive a crash in the cryptocurrency market.
1. Don’t Invest What You Cannot Afford to Lose
Take care of your other financial needs before cryptocurrency. That means setting aside money for your home, food, clothes, and basic necessities. It also means creating an emergency account that will support you for 3 -6 months in the event of a job loss. Finally, for many people, it means setting aside money for less risky investments in a 401k account, Roth IRA, or other retirement investment vehicle. It’s much easier to withstand the cryptocurrency downturns when everything else in your financial life is in place.
2. Do Something Away from Cryptocurrency
Stop looking at cryptocurrency market charts filled with red because staring at the charts will not change anything. See if you can avoid a cryptocurrency chart just for a day or two. Go outside. Exercise. Spend time with your family. Do whatever you enjoy about life that does not involve cryptocurrencies.
3. Get Excited About the Buying Opportunities
Just about every cryptocurrency is cheaper during the market crash. The sea of red on the cryptocurrency chart can be a beautiful sight if you have been waiting for a downturn to snatch up cryptocurrencies at a discount. For example, maybe you missed the litecoin run to $300 and now is your chance to get into litecoin at half that price.
Cryptocurrencies are not a get rich quick scheme for most people. The XRP investors who took profits on their investment at $2.50 or higher endured six months of bouncing between $0.15 and $0.30, which in any non-crypto investment would be an incredible return in a short time period. Bitcoin investors endured years of waiting after the crashes in 2013. It often pays to do nothing.