5 To-Do Things during Crisis for Cryptocurrency
The global economy always reacts during the crisis and its evident that it has created a shockwave amongst every individual. In the present situation, the Coronavirus pandemic has created a historic swing in the financial sector and not just that but also amongst all aspects of every individual’s lives. The pandemic made us realize that even if we are ahead of science and technology we are yet so unprepared and how much we have taken things for granted. The present situation has even brought volatility and fluctuations in almost every direction of financial streams including cryptocurrency.
As the quote by Dwight Eisenhower says,
“Good planning without good work is nothing.”
Even though the situational reason is different this time, but it is important to understand that recessions, depressions, and correction plays a part in the natural cycle of the market.
A plan for action is so important in almost every situation. Hence, we have laid out things you can consider following during a crisis.
Also Read, COVID-19 — Its Impact On Bitcoin And Its Update
Investment for Retirement
It is very important to invest money and save for retirement, unless of course till the time one is not retired! And one should keep the same strategy even during the crisis. Economic crisis can be pulled out for an opportunity for buying assets than selling if viewed for long term fruitful gain.
You have been saving for your retirement for a long time now and even if it is the economic crisis it will eventually be stable and you will be able to recover. One can passively invest and average the dollar costs in the stock market through the tax-deferred fund such as 401K or IRA.
Think about the financial crisis that led in 2008, if you were in the market and experienced the portfolio drop of over 50% then you must have also realized how effective it was to stick to the market especially when the new bull market started in the year 2009 and continued.
The emergency fund
It is very important to have sufficient cash set aside which the least should cover a year. It can be of great help during an emergency, economic crisis, or at times like this. If assumingly you still have your income rolling then it can turn out to be very effective to set some money aside for various emergencies.
Also Read, Financial Crisis And Its Effect On Bitcoin
Overall savings of cash
Apart from saving cash for the emergency situation it is also important to have cash kept aside as it can be of help to manage risk and also increases your savings. Even with cryptocurrency, for instance, if you have money in your cryptocurrency portfolio and treated as an asset, you will realize that the value of the Bitcoin in your portfolio rises even when the price of the Bitcoin drops. The same applies even with equities as the power of your buying associated with cash increases when the equity is cheaper.
Any person who is a smart investor will always have a part of its portfolio into cryptocurrency especially Bitcoin. Cryptocurrency, in general, is an unrelated asset hence its value is not determined unlike other assets or traditional currency of its underlying factors. However while investing in Bitcoin, you should invest by calculating the dollar cost average so that it can help you to assess the risk.
Be a part of everything
One should never invest everything in one particular thing. Even if one invests in Bitcoin, it must have a diversified portfolio with almost multiple assets. Basically one should opt in to invest in various assets than investing in one single asset. The present economic crisis is of course very saddening but also is a time for the cryptocurrency investor to invest and buy carefully in the stocks or other assets that are cheaper.
With detailed study, knowledge and thorough management of your finance’s portfolio, you will be able to securely navigate your money in various financial assets. A decisive approach with investment can be in the long run very fruitful.
As Warren Buffet said,
“Do not save what is left after spending but spend what is left after saving.”