5 Tips for Surviving the Next Cryptocurrency Crash

Cryptocurrencies or as many call them, digital gold are a very profitable and popular way of investing today. In many ways they differ from fiat money – they exist only in digital form, are stored in a digital wallet, transactions are very reliable and protect the identity of clients, and in addition, take place peer-to-peer, ie without intermediaries, their work is based on blockchain technologies that make them very reliable and safe to use, and on top of all that, neither the banks nor the government has power over them, therefore, there is no central authority. In addition to the many features that cryptocurrencies possess, volatility is one of the most important.

What is volatility?

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Volatility is the equivalent of a frequent change in value, to which cryptocurrencies are very prone. Recognizing the market risk that emerges as a financial bubble implies analyzing the trend in the value of Bitcoin over time. The financial bubble depends on the characteristics objects of investment. For now, there is no clear and unambiguous position on how to define the term financial bubble. One way of detection is access to determining the price of a property. And what do we do if the financial bubble bursts or simply the currency we invested in loses value and we experience a severe financial blow?

Experiencing financial loss is not easy at all, especially if you have invested everything you had and now you have to suffer the consequences. There are few things you can do now to fix this because the damage has already been done.

The loss of cryptocurrencies is closely related to their volatility and this is what most often leads to a loss. The moment the value of a cryptocurrency falls, people rush to sell it as soon as possible, the juice still has any value, and experienced people say that this is the last thing to do. All those who “survived the decline” by not selling their cryptocurrency had to simply wait for the market to recover. Sometimes market recovery is a slow and time-consuming process, but it is also one of the best steps you can take.

So, if you have invested in cryptocurrencies and are not sure how to survive the next crash if it happens, here are some guidelines that can help you with that.

You are entering several different cryptocurrencies

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Each cryptocurrency has a different value, and it changes independently of another. Before you invest in what you have in one currency, believing that it will bring you wealth, it might be a good idea to consider investing in several different currencies. This way you will definitely save some of the money, as there is little chance that they will all lose value at the same time.

Reliable trading software

To get into trading safely, you need to find a reliable platform to which you will entrust your money because today there are many fake platforms whose primary intention is to steal your money. You can find more about it if you read here.

Given that many today prefer to use smartphones rather than computers, make sure that the platform also has a mobile application that will make it easier for you to handle.

There is also another useful thing that could save you, and that is an application that tracks the market for you. You can set up these applications as you see fit, to spend your free time well with your family, while the application, using artificial intelligence, does not allow any change in the market to go unnoticed.

Cryptocurrency valuation

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Before investing, it is very important to get to know the cryptocurrencies as well as the market. It might not be a bad idea to consider investing in more different ones so as to reduce potentially large losses. Monitor the situation on the market, research, the more you know, the better the chances that you will avoid a total loss.

Beware of scams

The Ponzi scheme represents one of the greatest frauds of all time, and he carried it out Charles Ponzi. Understanding this fraud is important because its basic scheme after it was invented by Charles Ponzi, was later applied in incredibly large numbers of cases. Over time apart from the classical Ponzi scheme, similar structures have emerged as is a “pyramid scheme” and an “economic fraud bubble”. The pyramid scheme is based on the mistaken belief in investments that provide high rates of return. To participate, members are most often contacted through seminars, email, or home meetings. In a typical pyramid scheme, members generally pay to join. How would everyone make a profit, the number of investors should be infinite?

Learn about the risks of cryptocurrencies

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In addition to the economic risks of cryptocurrencies, which include a ban on the use of cryptocurrencies by government regulators or for example price volatility, there are also technical risks that are important to know before trading or investing in cryptocurrencies. It’s earlier explained how the Blockchain protocol is secure, as well as the digital wallets that are secured cryptography. On the other hand, cryptocurrency trading sites are located on the internet as well they do not depend on the security of cryptography, but on the security of the Internet.

Digital wallets are meant to store money, but some don’t do it well enough. We divide wallets into hot and cold. Hot wallets are exposed to hacker attacks because their keys are online, making them easily accessible for theft. On the other hand, cold, hardware wallets are much safer, but also more expensive. During each transaction, the device must be physically connected to the computer and to the device enter a pre-created pin to authenticate the owner of the hardware wallet. From the fact that cryptocurrencies are exclusively digital in nature and are not regulated as other means of payment arise from additional risks that traditional financial instruments do not susceptible to. Therefore, before any eventual investment, it is important to be aware of the risks of trading and cryptocurrency storage.