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How to Minimize Risk During a Bear Market in Crypto

These are hard times for the crypto market. The price of Bitcoin has been dropping for 9 weeks in a row which has never happened before.

Dean Jovceski



In times like this, it is of crucial importance to have strategies that can minimize your risks. We are in a crisis that has never happened. The negative trends continue week by week and are breaking all the records. Of course not the records that we want to break.  

Minimize the risk during a bear market in crypto. How?

In order to minimize the risk during a bear market, you will need strategies to do it. Here are some ideas and strategies that can help you minimize your risk during these hard times. What the future holds currently for the crypto market is unknown.

Maybe the market will pop back up right away, or the crisis can last for more than a couple of years. It is safe to say that we need to prepare our strategies in order to minimize the risk.   

Analyze what you are willing to lose

Every people know their own budget the best. Some people invest from the money that they put aside, money they don’t really need, but also there are people who are investing everything they have in crypto.

This is a very simple strategy when you shouldn’t lose anything more than you can afford to. Investing more money than you can afford to lose is a gamble you mustn’t take. Be careful with your investments.

Currently, things are so uncertain, and if you cannot afford to live with losing all of your portfolios just don’t invest money in crypto at the moment.

If you decide to invest in crypto we recommend you invest in USDC. They are based in the US, they are audited and they currently seem like safer than the others. But even if this is too risky for you go out to sell and go back to fiat. This is probably the least risky way for you.

Transfer your altcoins to Bitcoin

If you are already in the crypto business that means that you are already familiar with the risk and you are willing to take some small risk. Transfer your coins only in Bitcoin, not even in Ethereum.

The reason for this is that even though Bitcoin is in red every week the drop is very small like 1 to 2 percent. Currently, all the other coins are dropping like 8 to 10 percent, and some even up to 15 percent.

This way if the negative trends continue you will lose a small percent of your total value. Keep in mind that by doing this you are minimizing the risks but also the possibility of gains.

Blue-chip projects

If you are more risk-tolerant this can be the strategy for you. This means investing all of your coins into the top 10 or at least top 25 projects.

These projects have a higher chance of surviving a crisis for a long period of time. The actual scenario is that the bear market can last even a couple of years. So look for projects will the largest market cap that have already survived the previous bull market.

Keeping the altcoins, only the ones in the top projects will not eliminate the risk, but it will at least minimize the risk.

Dollar-cost average

This is the last and the riskiest strategy you can take. This basically means buying crypto on a scheduled time, like a bot. For example, you can schedule buying crypto every Monday at three o’clock, whatever the price is.

The scheduling can be daily, weekly, or monthly. You set a fixed price of money and on the day you set you will buy a certain amount of crypto. In this case, you don’t care about whether the prices are going up or down.  

For implementing this strategy you first must turn off your emotions and continue to buy, buy and buy. This is a very tough strategy to do, because especially in this period if you are buying daily you will see your money disappear.

The whole point of this strategy is that is almost impossible to time the market and buy at the perfect time. Studies have shown that if you dollar-cost average you will start getting insane gains but after two years. For the first two years, you will be hurting but it will pay off if you continue to buy.

Also read: Top 10 Promising Projects That Will Survive the Crypto Winter

This is Dean and he is a former banker with a passion for writing. He has Bachelor’s degree in Economics and an FCE English level certificate. Dean is an honest person looking for long-term partners and always giving clients more than they expect.

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