Coping in a Nasty Bear Market: The Crypto Investing Practices I Use (Part 2)

The sky is falling! The crypto bubble is over!

Stop, just stop. Don’t let the crypto bear markets get you down.

Now, just like the dynamic upwards price movements we’ve seen all throughout 2017, the bear markets in crypto land can be and ARE particularly severe. Every bear market can seem like a recession with coins being slashed for over 50% of their value in a matter of days. These times are hard, no doubt… but it’s important to remember a few points before and during your time here that might help.

Don’t invest more than you can afford to lose

As much as I enjoy, advocate, and am inspired by blockchain technology and what crypto currencies have to offer future economies, IT IS STILL SUCH A NEW THING. The majority of everybody only knows what Bitcoin is because they’ve heard about it once on CNBC. This entire years’ growth in trading volume and price has been a unique mixture of legacy players increasing their stakes, groundbreaking news, genuine advancements in blockchain tech, ICO ridiculousness, and stupid money flowing in to substantiate current valuation.
Everything we put into supporting the ecosystem is 100% speculation. There's nothing wrong with that, but it's important to note that there are no strongly reliable valuation methodologies you can apply to crypto currencies. Keeping this thought close to the chest will help in practicing some restraint from putting too much in.
Consider this. The moment you put everything in with hopes of striking riches… Well, sounds a bit like gambling, doesn’t it?

Learn to HOLD

Now this is a lot easier to do if you’ve already done Point #1. But learning to HOLD during bear markets can save you from making some very costly emotion driven sells.
There’s a very fine line when it comes to HOLDing during bear markets in the crypto verse. You have to develop some thick skin. The way I see it, for the opportunity to experience over 100% gains, you should be prepared to experience similar losses… with the thought in the back of your head that IF YOU BELIEVE in what this tech will do, the current downturn doesn’t mean too much.
Just remember that at least for the past two years, every single bear market has been met with an even more EXPLOSIVE bull market. It’s hard to see your coins get pounded, but just hold on, things are likely to climb up again! Develop your mind for the long term.

Example:

I had some ETH with no target price really set in my mind (it’s something that I plan to hold for at least a couple more years, regardless of price). Quite frankly, the explosion of Ether (to the degree it’s experienced) was unexpected. So I held, with no real ambition to sell, and then it grew to $380 for the first time earlier this Summer.

Then ETH plummeted all the way down to $120 and swung around the 150 - 200 range for the rest of the Summer. I’m not going to lie, thoughts of “what if we go back to 10?” has the “bubble really burst?” clouded my thoughts, but I continue to trust in the impact Ethereum will make and held to this day. Not trying to stroke my ego, but had I sold because of fear, my gains would have marginal. But looking at the price right now, we’re right back to $380 in a rebound that’s just as vigorous as the bull run during the start of the summer. In other words, if you believe in the community and the tech, HOLD FIRM, and ride out the rough waves…. the light is often at the end of the tunnel.

Crypto investing can be a really fun and really scary place! Just remember to invest in what YOU BELIEVE IN, and don’t bet the house on it thinking this is your way to the big bucks.

As always, stay safe guys and gals!

Cheers!
HK

Disclaimer: I do not intend to give investment advice in these articles. I only hope to show others how I think, act, have performed in this marketplace, and further hope to spark conversation on what others believe to be good discipline.