Crypto-winter. What is it and how to prepare.
If you saw the end of the first crypto-hype in the winter of 2017–2018, then you remember with what gloating skeptics rushed to bury the crypto market. Someone in fear began to sell their mining farms, for which sometimes they even sold real estate. And someone did not panic, and saw for themselves an opportunity to buy cryptocurrency at a lower price, in order to sell it later on “highs” when the next hype comes.
Now we see that after BTC almost reached $ 69,000 in the first half of November, it began its gradual slide downward, pulling the entire crypto market with it. This trend has been going on for the second week and will probably continue further.
Crypto enthusiasts are calling the crypto winter a potential long-term bearish trend that could develop in the winter.
The crypto market has steadfastly endured the ban of cryptocurrencies in China, Musk’s attacks on BTC and a massive desire to withdraw crypto-savings to fiat towards the end of the year. Although these factors combine to drag the crypto market down, it’s too early to panic.
Why will the crypto market stay with us for a long time?
In 2017–2018, skeptics tried to convince people that the crypto market is nothing more than another bubble. Then there really was no confidence that the crypto market would be able to rise from the bottom and the next hype would begin. However, after the records of 2021, hardly anyone had any doubts that the crypto is with us for a long time, and there are a number of fundamental reasons for this:
1) Despite the enormous volatility, BTC and many other crypto assets are viewed as a defense against inflation, a kind of safe haven in the seething ocean of chaos in the fiat monetary system. Now the rampant quantitative easing policy is only exacerbating the crisis. Sometimes, BTC prices show surprisingly strong correlations with other typical “safe” assets. For example, sometimes the correlation between the price of gold and BTC was over 70%. Crypto assets are insurance in case fiat currencies are printed again out of control.
2) Cryptocurrencies are a decentralized monetary system and there is little that can fill this niche right now, especially in a situation where central banks are stifling cash in favor of CBDC. Of course, not every supporter of decentralization is a freedom fighter, decentralization is also beneficial to lovers of all sorts of shady deals, such as drug trafficking or tax evasion — which opponents of cryptocurrencies like to talk about. But as long as the underground exists, there will be a need for underground transactions.
3) The crypto market has simply reached the “Too Big to Fail” level. So much finance is already concentrated on this market that it is a very difficult task to bring it down. It has long ceased to be the territory of geeks and marginals, large institutional investors and even governments(El Salvador) began to massively come to the crypto market.
As we can see, there are more than enough arguments in favor of the fact that the crypto market is not going anywhere in the long term.
So what preparations need to be made to get through this coming crypto winter?
Everything in the world obeys cycles and the crypto market is no exception, you need to be prepared for bearish trends.
1) To be ready means to be ready morally in the first place. Refrain from panic selling. You should not immediately rush to sell all assets as soon as the market turns red. Keep your cool — the decision to sell should be as balanced as the decision to buy.
2) Don’t put all your eggs in one basket. Portfolio diversification is a reliable and proven tool. During the fall of the crypto market, the time is right to shop at the lows, but it is worth purchasing a variety of tokens. Yes, the crypto market has been with us for a long time, but the top 10 cryptocurrencies are changing quite quickly, except for BTC and ETH. Buy time-tested tokens, but it makes sense to collect more “exotic” ones.
3) It is possible to wait for a long time until the next HYIP, but money should not be idle, money should work. If you intend to ride out the bear cycle without selling your cryptoassets, then staking might be a good idea. Therefore, it is worth taking a closer look at projects that support such functionality. For example, you can stake BRTR tokens using our telegram bot with a yield of 22% per annum.
The main advice here is, all the same, be patient and don’t panic. Have it your way, methodically turning the situation to your advantage.
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