The cryptocurrency market has had extremely high peaks and low depressions over the past few years. Last fall saw the high of several coins, with Bitcoin (BTC) exceeding $68,000 per coin and Ethereum (ETH) surpassing $4,600.

Then the summer crash followed. Many popular cryptocurrencies crashed, with Bitcoin falling below $20,000 per coin and reaching its lowest level since 2020. For the very first time since early 2021, the market cap of cryptocurrencies sank under $1 trillion.

Perhaps the current crypto dip is finished. The value of the major cryptocurrencies Bitcoin and Ethereum has recently increased, and the overall market value of cryptocurrencies has once again crept back past the $1 trillion threshold.

Analysts appear to be cautiously hopeful. Even though trade volumes are still low, several observers have remarked that the cryptocurrency markets have found a floor.

Using the Concept of Gambling to Explain Investment

Even though gambling and investing differ, risk and high payouts are common elements in both. Generally, it is reasonable to assume that the expected return will increase as transactional risk increases.

Roughly speaking, acquiring low is preferable to buying high regarding long-term and uncertain investments. Like trying your hand at casino gambling, investing in cryptocurrencies entails a great deal of uncertainty.

In online casino games, players should first familiarize themselves with the rules of the games, as well as the terms and conditions of the platform. Experienced wagers advise on taking advantage of UK casino bonus before trying their luck in casinos.

The same case applies to Crypto investing. Ensure you conduct sufficient research to minimize risks and make a secure investment.

What Investors Can Do to Prepare for Crypto Market Changes

Analysts assert that if crypto has indeed reached its bottom, there is only one direction left to go: up. Even if the analysts may be upbeat, there is no assurance that cryptocurrency is yet out of the woods.

It’s crucial to be prepared because the cryptocurrency market has plummeted in the past and will probably do so again. Because cryptocurrencies are infamously dangerous and volatile, investors may experience market fluctuations of more than 50% in a relatively short time or even 15% price increases in a single day.

Here are three steps you may take to safeguard your finances when the cryptocurrency market is experiencing extremely high volatility and uncertainty:

Prioritize Your Budget, Debt, and Savings

Ensure your finances, debt, and savings are secure before investing in cryptocurrencies. You can feel confident that you can still achieve your financial goals by having a sound budget and emergency funds.

Diversify Your Investments to Minimize risks

It seems sensible to take certain precautions to protect your investments against the unpredictable market. Diversifying your investments is the greatest method to achieve that. Cryptocurrency should only make up a small fraction of your overall equities, bonds, and mutual fund portfolio.

Invest Only What You’re OK With Losing

To invest in cryptocurrencies, you must have a high-risk tolerance, and you should only put up money you’re willing to lose. Experts advise adhering to the 5% principle, which states that you shouldn’t allocate over 5% of your portfolio to riskier assets like cryptocurrency. Studying and comprehending all the hazards of cryptocurrencies, as with any new investment, is crucial.

Shift Frequency © 2022 – The Fate of Cryptocurrency
in 2022 and Beyond