Crypto Bear Market 2021: What’s your Game Plan?
Alright! Alright! Alright!
Let’s spill the beans…
Let’s, for one, accept that we have been wronged a little by our own greed…
When the market was giving all the signs of being at the top, we keep riding and hoping for more returns…
The phase is called “Euphoria” in the psychology of the market cycle…
Elon’s tweet was the beginning of everything, and the slew of bad news has made the market high volatile and started a bear cycle…
Now, I have always been emphasised keeping 60% of our portfolio in a Blue-chip company that is only Bitcoin and always keeping 10–15% in USDT so that we could take advantage of the volatility…
But let’s ask ourselves, how many of us missed out on following this simple principle of investing in cryptocurrency.. Some of us made that mistake, and the market is not forgiving; this leads us to erosion of a significant portion of our net worth in the crypto-assets…
But the biggest question is;
❓what should we do next?
❓How do we navigate this choppy market?
❓Should we cash out all, or should we stay invested?
❓Should we reshuffle our portfolio?
If history has taught us one thing, that is “When everyone is greedy, be fearful, and when everyone is fearful, be greedy”. Right now, it’s time to be a little greedy, and a sophisticated portfolio allocation would be your best bet.
Here is the current crypto fear and greed index:
No one can speculate how the market would be in the next 6 months or In the next 6 years, but one thing is for sure, the cryptoassets are going to stay, and it’s not going anywhere. Do you know, More than 1T has been wiped off from the crypto market in the past few weeks, and The global crypto market cap is sitting at $1.42T, an 11.10% decrease over the last day alone.
Here is how I’m navigating it, and you should pick a strategy based on your risk appetite:
✅I have liquidated some of my mid-cap and small-cap bags, and my 20% investment is still in the small-cap and risky instruments (The ones that are bleeding really hard, but I’m still holding them). This is the amount of money I’m ok to lose if the market goes south.
✅I have been accumulating and holding mostly in BTC because, in my understanding, my 45% is in BTC, 10% is in ETH, and 15% is in stable coin. To be honest, I feel I should have less in stablecoins now, but earning 18–20% in stable coins (using Anchor protocol) returns is good and something we all should attempt to do. I will be slowly increasing my portfolio exposure to 55% in BTC. (Do note: I have a high-risk appetite)
✅ If your portfolio only has altcoins/shitcoins, you should rebalance/reshuffle your portfolio and have almost 70–80% exposure in; BTC (50%+), ETH (10%+), and USDT/UST; Rest 20% could be in high-quality growth giving projects Based on your conviction and research.
✅ We don’t know how long this bear cycle or sideways market could go on, and I have seen many such cycles, and let me tell you, it is boring. Because at one hand, we were seeing 5–10% growth a week, and now we see the opposite. So buckle up for a bumpy and boring ride, but how can you be an investor if you do not see a market cycle like this…..
✅ Also, a reminder that always book profits and take out your initial capital and play with house money. That’s why using a portfolio manager like “CoinStats.app” or “BlockFolio” is much needed.
✅ Also, a reminder to put only that amount of money in crypto, which you ok to lose. Crypto assets have proven themselves to be a highly rewarding asset class and riskiest of all. It is definitely not for the faint-hearted and requires resilience and patience.
✅ Also, a reminder that don’t overexpose your portfolio with Altcoins and shitcoins.
As one of the greatest investors of all time, Charlie Munger said,
“If you’re not willing to react with equanimity to a market price decline of 50% two or three times a century … you deserve the mediocre result”…
Also, watching the crypto market every hour may lead to stress, and it is not recommended. Have a macro view, and ask yourself,
❓”How do you see the future of crypto-assets in the next 2–3 years”?
❓Do you feel it’s just volatility (an opportunity), or it was all just a scam and will go down to zero.
I feel it’s volatility, as the fundamentals have not changed…
Now, it is your turn to let me know how you are navigating this volatile and depressing market. How are you handling your losses? What’s your ultimate game plan?
Looking forward to hearing your words of wisdom. Simply reply and add your comments.
Regards
