The crypto market is volatile. — Underrated statement
“Crypto markets are very volatile and unpredictable”
The volatility is partially due to the fact that the market never closes. Anyone can buy at any time of the day, unlike the stock markets. Since the technology is new not many people understand the technical terms and engineering behind each coin. Well, we at Moving aim to make crypto easy and accessible to everyone.
It’s one thing to trade crypto and an entirely different thing when it comes to investing in crypto. The major difference lies in the time period. You can either buy crypto, book your profits, we call it “Ready to cook” or you buy crypto, be a hodler. We call it “Slow-cooked”.
While the profits of investing can be wonderful, each dip and surge puts the investor in a dilemma. The dilemma of whether to hold or to sell. Smart investors and hodler may have their concepts clear but the challenge lies with the new investors. We jumped in the pool for you and brought four mantras that crypto investors swear by.
“Be fearful when others are greedy, and greedy when others are fearful.”- Warren Buffett
While the quote wasn’t actually said in terms of crypto, this has to top the list. In crypto markets, this can be interpreted as when people are greedy the prices boils up ad when people are fearful, the price comes down. To make it sound even plain, “Buy the dip and sell the high.”
Being greedy in any investment may bite you and Warren Buffett’s golden words are deeper than you think they are. While they were said keeping in mind the stock market and commodities, as crypto is emerging, these words apply here as well. Any coin’s value increase when people start investing in it and the circulating supply decreases and the demand increases. This is the demand-supply rule.
Circulating supply refers to the number of coins that are mined and are in use. Coins that are held as an investment are not included in the circulating supply.
“Price is what you pay. Value is what you get.” Warren Buffett
One more by Warren Buffett and why not! This simple mantra can very much help you understand the entire crypto market very easily. Cryptocurrency is a hedge against inflation as most people know but what does that mean? Inflation is basically the in-flow of currency in circulation which decreases the value of the currency at a certain rate. Investing in crypto helps you save that decreased value but that confuses you provided that the exchange value of crypto is uncertain. In such cases, you can move towards pegged coins or stable coins which are not volatile in terms of exchange value and provides a good enough hedge against inflation. At the end of the day, it’s not $1000 USD in your portfolio, it’s about where you invested that.
“Read, Understand, Plan and Invest”
“Cryptocurrency is built on top of blockchain where transactions are stored as a hash of their public keys.” — Loaded with technical terms.
The technical terms are tricky especially when you are new to the environment. While you may not need to know all the engineering put behind the project, you may want to know some basic specifications. What problem does the project solve? Is the solution feasible? What is the coin used for? These are some questions that you may want to consider reading about before investing.
Reading and Investing would help you in NOT getting REKT.
REKT is slang used in the crypto space to describe “wrecked”.
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“Never Panic Sell!”
New investors often tend to withdraw their crypto assets when the exchange value decrease, this is known as “Panic Selling”. Panic selling not only is a loss deal but is not a good practice to follow. Crypto investors need to be patient and very patient! The dips and surges come and go. Consider looking at the bigger picture and instead of panic selling, HODL.
HODL refers to Holding On for Dear Life! Fun, right?
These are some general and very strong mantras that would not only help you get good returns but would add value to your investment. While the above is not a piece of financial advice, they are practices that are encouraged. Crypto traders and investors may follow different practices and have different mantras but at the end of the end, we all are Moving towards the Future!