The crypto market went through rough times before – for instance, between 2017 and December 2020, digital assets’ prices fell considerably, and the industry performed very poorly. This prolonged price downturn is known as the crypto winter, which can lead to massive losses for investors. On average, crypto winters can extend over four years, and due to significant market turbulence, experts believe there won’t be an exit from it in 2023 – and probably not even in 2024. It will take time until the industry recovers and consumer trust is rebuilt, but that doesn’t mean it is all doom and gloom. This event may be a beneficial reset for legitimate crypto investors in the long run.
That said, this year has been brutal for crypto enthusiasts, and navigating such a challenging period puts a lot of pressure and stress on investors. But we’re here to tell you that sticking around through this crypto winter is possible – not by merely surviving but thriving. While challenging, the bear market enables people to build wealth. Looking back on the past, investors succeeded in the bull run because they endured the bear market and took advantage of new opportunities in price levels. While losing money is not fun, it can teach you a lot, allowing you to reevaluate your investment thesis and reflect on your past mistakes, so you can prepare yourself better for what’s coming. Analyzing the bitcoin price chart allows you to identify the opportunities in the market, and make the right investment moves.
Stay informed
The saying “knowledge is power” is very relevant in the context of cryptocurrencies. The market is constantly changing, and the only way to navigate it successfully is by keeping up-to-date with the latest news. Make sure to use reliable news sources and join online forums where you can discuss with like-minded individuals. That way, you will make smart decisions regarding your investments. Doing your homework will protect your assets during this crypto winter.
Diversify
Some investors in the crypto space call themselves Ethereum or Bitcoin maximalists. This word refers to their choice of investing in a singular crypto to max out their portfolio. According to these investors, other cryptos don’t provide the same risk-reward upside. While this strategy may have worked when the market was still nascent, it no longer applies nowadays. The cardinal rule of profitable investing is to not put all your eggs in one basket, which simply translates into diversifying your assets. Thousands of cryptos are currently available, so consider holding various digital currencies to mitigate the risks of price fluctuations. Instead of investing only in bitcoin, try stablecoins or altcoins – or even an old-fashioned fiat.
Choose cryptos with proven utility
Instead of opting for random crypto, focus on those with proven utility. In the crypto industry, the term utility refers to blockchain projects with real-world applications. A good example in this sense is Ethereum, which enables you to trade NFTs on various marketplaces. This digital asset also provides decentralized applications(dApps), smart contracts, and blockchain-based games. On the other hand, cryptos like Shiba Inu or Dogecoin have little utility. Investors don’t buy them because they have an inherent value but rather because their price can skyrocket. As a rule of thumb, it’s best to avoid meme coins during the bear market, as the only time they go up is during bull markets.
Lower your expenses
Reducing your expenses is a smart move you can take during the crypto winter. This involves both your personal and business expenses. Suppose you run a venture; in that case, it’s a good idea not to expand into new markets and stick to your central team instead. The same rule applies to your personal expenses. If your income is discretionary, consider saving rather than investing in unnecessary luxuries. This is a good way to weather the storm and will put you in a better position as soon as the market starts recovering.
Don’t panic
The worst thing you can do during a crypto winter is to panic. This can only result in irrational decisions and, ultimately, losses. Remember that crypto prices have always experienced highs and lows since this industry’s inception. But despite those fluctuations, the market kept growing, and new projects were born. This, too, shall pass, so don’t fret. Crypto is a rollercoaster ride, and you must stay focused and not let your emotions get in your way.
Remember to be patient
Wild price swings are normal in the crypto space – many times, major fluctuations can happen in just a matter of hours – or minutes. Hence, it’s essential to be aware of this fact and avoid panic selling when there’s a sign of a dip. Instead, you should exercise patience and adopt a long-term view. This crypto winter may last longer, which can be a hard-to-swallow pill even for steadfast believers. During bear markets, many investors build exceptional portfolios, but the real elements that can help you make the right moves are research, foresight and patience. Holding on to your investments may be beneficial once they bounce back in the future.
Don’t lose hope
Staying optimistic is probably one of the most difficult things to do during a crypto winter. But it is necessary, and you should keep in mind that the industry is still relatively new and has growth potential. So, don’t lose your enthusiasm and hope – instead, focus on learning how to make it on the other side by becoming more resilient. The frosty crypto winter will eventually come to an end, and spring will come. When that happens, you don’t want to miss out on the opportunities to make profits. Thus, keep your head up, and look for solid projects that are promising in the long run. If you HODL onto your crypto and remember to diversify, you’ll put yourself in a great position to take advantage of a future bull market.
Final thoughts
This year has been the greatest proof that crypto isn’t for faint-hearted people. While volatility can help digital assets reach significant heights, it can also result in considerable losses. Hence, the key to successfully dealing with the crypto winter is adopting a long-term mindset and embracing downturns.
