It has been clear now for a couple of weeks that cryptocurrencies have entered a bear market as people look to take profits while buyers are simultaneously put off from investing. I've been invested in Bitcoin since 2013 and in the long term I can still see a hell of a lot of room for growth. As somebody who is in crypto for the long haul the idea of selling right now has not even crossed my mind as I know that I would almost certainly end up regretting it when the prices are much higher in the coming years. However I don't want to invest more until it has become clear that we have reached the bottom and cryptos have regained some sense of stability.
MY STRATEGY
I don't like to keep my money stored in the bank getting eroded by inflation so I decided I would try to continue investing during this crypto crash. I opened an account with a spread betting company and shorted both Bitcoin and Ethereum. For those who don't know "shorting" is essentially betting that the price will go down, so in the same way that your investment would increase during an uptrend your investment instead increases during a downtrend. I believe we are now in a similar cycle to the one we started during the last crash at the end of 2013, it only makes sense as early investors will be seeking to cash in on their huge profits, especially in Ethereum. After I've assessed that this bear market is over I will then invest the money plus profits that are in my spread betting account into Bitcoin/other cryptos.
The reason I think this strategy works is that I believe long term cryptocurrency trends are quite predictable and run in long bear and bull market cycles. I mainly use a buy and hold strategy but to me it just doesn't make any sense to start buying again until we have reached the bottom, so why not use this downtrend to make a little extra money on the way down that can be used to purchase more cryptocurrency when the bear run is over?
I'm not an expert investor but I wanted to share my thoughts to get some comments and criticisms from my fellow Steemians. The spread betting site I use is eToro, if you sign up via my link we will each recieve $20 http://etoro.tw/2v4HNpY
Please let me know what you think and if you have any alternative strategies during this downtrend.
Your point makes sense, in particular now where it's 3 weeks we are going down and we still have other 2 to go, most likely...
BTW my strategy is still bullshit and I'm just keeping accumulating, I've done that every week since ETH was at $10 and even if the price is going down I am trying as much as possible to stay away from being a daily trader... That IMHO will bring mistakes in the long run..
Yeh being a day trader is just too risky and I think it's mostly done on technical analysis alone. With crypto it's better to invest along with the longer term trend, and like you say for the next couple of weeks it's likely to decline further. After that we'll see.
Just the stress really is unbearable for me, I don't know if shorting is what cryptos need. It's very risky business and cryptos already have huge volatility. Steem with it's SBD is a fantastic opportunity actually and I think maybe the twelve weeks withdrawel for steem power might be shooting ourselves in the foot. Tether certainly attracted a lot of capital shooting to 285 million market cap.
Try not to worry. I went through this crash last time and it recovered. Just sit tight and make sure you continue to follow whats going on with cryptos and don't give up
I meant the stress of day trading haha, tried it for a day or three made like 10 euros on 100 around the time brexit happened and said nope no way I am doing this with larger amounts. I'm not giving up on cryptos in general. I moved my blog about aquaponics from some random forum to here, I think it's great to find some people with similar interests gardening and cryptos. For all intends and purposes steemit is like THE social media for crypto fans.
Yes, the community around cryptos here is really good and active, a lot of people give a lot of good advice and it's amazing to see everybody taking feedback in an amazing way :) hope it scale in this way!
following you for financial advice. Is there a story behind Basic Attention Token? sounds funny
The thing is that if majority consensus is reached before the update, there will likely be a huge price increase. The markets are waiting for a signal that things are safe. As of now there is still some opposition.
The other funny thing is, if that markets were sure things were safe they would also probably sell out now because the innovation is already agreed upon and the market will be too stable to profit.
I think no matter what this price drop would happen, just buy the dips and sell the highs(short term), and long term HODL
Do you know what percentage is needed to achieve a majority consensus for segwit? It's already at about 85% isn't it?
100% agree
How do they say: "Never catch a falling knife"...but it is so tempting at the moment :)
Yes of course this isn't without risk but at some point it will become clear the bear market is over and that is when it's time to withdraw the money and put it into owning crypto
My strategy is: to buy while the market is totally down, like it starting now, grab as much as you can till 1st of August. :))
And hold....will pay out later... :D
I don't think that the whole segwit debate is the real reason the market is down, Ethereum doesn't have that problem for example yet it's down by a lot more than Bitcoin. I think it's just down to people who invested at a low level taking their profits and avoiding the risk of losing it all
@captaincanary your decision is right . Its better to invest your money in cryptocurrency, you can earn huge money in cryptocurrency .