How to Invest in Crypto in Uncertain Market Environment?
By Alice 29 Sep 2022

"Over the past few years, investors have been plagued by incredible uncertainty. We delved into different investment approaches to use during these tough times."

Over the past few years, investors have been plagued by incredible uncertainty. War, pandemic and economic collapse are headline news. In today's post, CoinMarketCap Alexandria takes a deep dive into the different investing methods used during these tough times.

The uncertainty and market correction will test the nerves of many investors. After all, watching your portfolio fall sharply can be hard to stomach. There has been a lot of testing over the past few months, and Bitcoin prices have corrected by as much as 75%. Even stock investors were hit hard, as the S&P 500 was cut 25%.

In these uncertain times, there are some golden principles to keep in mind. First, it's okay to feel emotional and anxious when markets feel unpredictable. However, you must keep your emotions in check when making investment decisions. Don't let fear or stress keep you from making a sound investment.

Another key principle to keep in mind is the benefit of diversification. A diversified portfolio is less responsive to market fluctuations and will rise more steadily over the long term; In times like these, you should focus on the same long term. It's impossible to predict what will happen next week, but you can be more confident that prices will be higher five to ten years from now.

Finally, managing risk is crucial. Whether you use stop losses, manual failures, or only invest what you can afford to lose, you must have a predetermined approach to risk. There is no one-size-fits-all approach here, it depends on your personal preference. Investing in uncertain times is more about survival than quick profits.

Let's dive into a few ways to make it all come together over the next few months.


Take a long view


Rather than looking to close out positions, look for investments to add to your portfolio in uncertain times. By staying invested, you'll be in a good position to make money for years to come. In general, a good approach is to get rid of investments that look bad even in the long run and replace them with investments that you expect to achieve better results. For example, you could sell your LUNA as BNB or your Snapchat stock as Apple stock.

With a long-term view, you may also want to consider taking a longer time to buy into the market. Don't worry about not being able to buy the exact bottom, just buy the dollar cost average of the asset you want to buy. This way, you will slowly increase your exposure over time, while reducing your worries!

Of course, you should do proper research before buying into any market.


Intraday trading


After putting money into long-term investments, you need to minimize your focus on your portfolio. Leave it at that. Focus on something else. A good way to do this while increasing your net worth is to trade in a shorter time frame.

This may sound contradictory to the previous paragraph, but short-term trading is another good way to reduce uncertainty. Inflation-related volatility is focused on scheduled news events such as the CPI print, so you can enjoy fairly clean price action when the dust settles.

HFT returns compound quickly and (if you are successful) give you more money to put into the market. There are many different technical analysis guides in and around CoinMarketCap Alexandria. Use this time to improve your skills! Build your long-term portfolio and use a small portion of your money to profit.


Safe havens and recession investments


In times of market turmoil, look for investment opportunities that will perform well under any circumstances. Depending on your requirements, this will lead you to different types of investments.

An investor will tell you to buy gold or silver as a perfect hedge against uncertainty. Other investors will tell you to buy Treasury bills, hold cash or buy bonds. These types of investments are backed by the government and are considered by most to be risk-free. However, with inflation running at around 8%, these investments will still leave you without purchasing power because they typically generate returns below such inflation rates.

Seasoned cryptocurrency investors will tell you that now is the time to look for untold gems and buy them at staggering discounts. Crypto Winter allows you to buy tokens at a "discount" of up to 98%. Your job as an investor is to find tokens that can get through the winter together and join the ranks of all-time highs in the next cycle, without getting bogged down in overly optimistic "discount" talk.

Finally, one might consider buying recession-proof stocks such as Walmart, Costco, or McDonald's. Decade after decade, these companies have proven their worth in any environment. Investors look for companies that can weather any economic storm and continue to grow even in the harshest conditions. Many of these companies pay dividends regardless of market conditions, which can compensate for a potential across-the-board decline.

Recession-proof stocks may not generate triple-digit annual returns, but investing in uncertain times is more about survival than making money.

All in all, there are ways to weather the economic storm. You can choose to hold cash or go all in on family stocks. As usual, there is no one-size-fits-all approach to the market, and different investors will take different approaches and succeed. Whatever approach you take, you must do your due diligence, take your time, and use a risk management approach appropriate to your investment choices.

We wish you the best of luck in the coming months and look forward again to simpler times.


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