The Bears are Coming, Run, Hide... Cryptocurrency markets are crashing in July, 2017.
In this article we will explore three different ways you can protect your crypto profits during a down market.
It's hard not to notice the sea of red that flows over exchanges like Poloniex and Bittrex these days. If you are new to cryptocurrency this must feel like the end of the world if you are one of those investors faithfully 'HODLing' (hold on for your dear life) your favorite altcoins.
Take a look at this chart and try to determine what stage the cryptocurrency market is at right now.
Have you noticed the Sea of Blood that has recently emerged in the crypto market in July 2017?
The market really has taken a beating and rightfully so based on the following reasons:
1.) Cryptocurrencies increased exponentially and set new records in the first quarter of 2017.
2.) A number of ICO's came in July and some of those ICO's decided to trade their ETH earnings for good old fiat.
3.) ETH had problems keeping up with transaction speeds and people had to wait.
4.) Coinbase crashed on several occasions / GDAX had something called a 'flash crash' where some people had their ETH liquidated for as low as $.10 (those poor bastards...)
5.) Bithumb was recently hacked and funds went missing.
6.) Investors want to take some profits and enjoy their winnings.
But the biggest reason for the selloff (IMO)
7.) August 1st is the deadline for a hardfork in Bitcoin and the implementation of Segwit 2x. This is a huge time of uncertainty for Bitcoin as even the mythical founder Satoshi said that Bitcoin should not be forked at any time for any reason (but we are at a crossroads because it is desperately needed).
What does it all mean?
The cryptocurrency market being a relatively new market based on mostly speculation makes for exciting times, new fortunes will be made and many will lose their shirts as this market develops.
Here are a few options for protecting your capital without converting to FIAT:
1.) Convert to USDT
'USDT is a cryptocurrency asset issued on the Bitcoin blockchain via the Omni Layer Protocol. Each USDT unit is backed by a U.S Dollar held in the reserves of the Tether Limited and can be redeemed through the Tether Platform'
You can convert to USDT on most popular exchanges such as Poloniex and Bittrex.
Here is a good article on USDT (Tether) - https://www.cryptocompare.com/coins/guides/what-is-usdt-and-how-to-use-it/
However, this method comes with considerable risk. After additional research, this is a statement that you should really consider before buying USDT coming from Tether's own TOS:
PURCHASE AND REDEMPTION OF TETHERS: The Site is an environment for the purchase and redemption of Tethers. Once you have Tethers, you can trade them, keep them, or use them to pay persons that will accept your Tethers. However, Tethers are not money and are not monetary instruments.
They are also not stored value or currency. There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money. We do not guarantee any right of redemption or exchange of Tethers by us for money. There is no guarantee against losses when you buy, trade, sell, or redeem Tethers.
This can be read on the Tether TOS page - https://tether.to/legal/
2.) Convert to BitUSD
'The bitUSD is a premium asset that comes with a strong "peg" to the U.S. Dollar. The underlying mechanics ensure that it does not sell below $1 worth of BitShares equity.'
@Zeroc wrote a wonderful article about BitUSD and how to use the system that can be read here:
https://steemit.com/bitshares/@xeroc/what-makes-the-bitusd-than-nubits
Both USDT and BitUSD seem to be very good choices as a store of value during turbulent cryptocurrency markets.
Or just do what people did before all these new high-tech next-gen options. Go back to the basics...
3.) Convert to BTC
Although you won't be completely protected, altcoins are traditional much riskier than the godfather of all coins Bitcoin.
You won't have the same security as FIAT (although I feel foolish saying this because FIAT has certainly had its day and the printing press is certainly running 24/7).
But, don't forget that Bitcoin is the founder of all crypto, it's value is undeniable and it has the largest network effect of all cryptos.
Final Thoughts
Cryptocurrency is a new phenomenon and there are bound to be a few bumps in the road.
If you truly believe that crypto / altcoins and Bitcoin have a bright future than consider just sitting tight (HODL) if you've already accumulated losses.
Assuming you have invested in projects that you like, remember, nothing has changed about them. Many of the people reading this article may have used USDT or BitUSD as an alternative, many may have sold their altcoins for bitcoins and then sold their bitcoins for Fiat and prefer to wait out the big change coming up for Bitcoin on August 1st, 2017.
The market cap for cryptocurrency has gone from 20 Bil to 100 Bil in a very short time. What's to keep it going from it's current position at 80Bil to 800Bil? Only trust, belief and mass adoption.
Happy trading and may we hope for many green days ahead!
For more articles please follow me @ldauch
Sources:
@Zeroc 'What makes the bitUSD better than nuBits'
https://steemit.com/bitshares/@xeroc/what-makes-the-bitusd-than-nubits
I think its already too late to go back to Fiat or tether, everyone has already taken a lot of losses and the only thing we can do is Hodl!
Market manipulation... Remember the whales have more control over the price than we do. Your thoughts are spot on.
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Looking at the market like.
Haha keep your head up Roy! Might look at this month and laugh down the road. Or everyone is eating mac and cheese this year! Take care brother.
Roy,
I hope you dont lose your shirt....anyhow, I think casino would be a better fit for you.
I love when someone low income like myself gets an opportunity to buy into the market and really grow my wealth. This is the time to buy for sure. Set your tickers watch as it does another spike into the future.
Hi CryptoBear ^^ Friends ! From DoGe
Thanks...I did not know about butUSD.
Yes bitUSD is a good option.
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Don't think is a good idea to trade the alts that fell a lot for bitcoin now.
If you trust the project and believe it may turn out just HODL it instead of getting a 70% loss or so...
and if you're a newcomer remember: always set your stop-losses. even for holding, if the prices fall you can usually buy it cheaper in the future.
let's see what happens in august, but i still believe in a bright future for bitcoin.
Wonderful article, I'll be watching this BTC rally and sell to USDT once BTC taps the top. Thank u followed u