Worried about crypto crash? Heres a smart piece of advice by Ashish Singhal from CoinSwitch Kuber
Here’s one way to think about the bear markets
Cryptocurrencies have declined significantly over the weekend. In lieu of this, Ashish Singhal, Founder & CEO, CoinSwitch Kuber, India's largest crypto platform (wrt users), has expressed his views.
Every financial market has up & down cycles aka bull and bear phases. Since the New Year, crypto markets have been testing the endurance of investors.
Current trends are a reflection of swings in global financial markets and news of regulatory proposals globally. Several early investors in crypto have also been booking profits.
In 2021, crypto stood firm during the peak pandemic and brought in an era of NFT as well as Metaverse tokens. NFT sales volume nearly touched the mark of USD 25 billion. Many start-ups and large companies including the likes of Nike & Facebook are betting big on these themes.
There’s a big talent migration into crypto (smart money follows smart people!). I see this as a signal, where the crypto community, as well as technology, are headed in the future.
Crypto markets have been through similar phases:
- 2014 — Bitcoin fell to USD 200, dropping as much as 86 per cent in value.
- 2018 — Bitcoin went from a high value of USD 20,000 to a low of USD 3,000.
- March 2020 — when markets crashed globally due to the panic of the pandemic. Bitcoin fell from USD 9,000 to USD 4,500 within days.
- In April 2021, however, Bitcoin reached an all-time high value of USD 64,800.
The drawdown phase or the bearish market can be scary. A lot of people lose money too. Investors, who have stuck through the lows in the past, have seen massive benefits when the market turns bullish.
Of course, your ability to stick depends on your overall financial portfolio, which should be built on the fundamentals like:
- Your emergency funds
- Life and medical cover
- Disciplined goal-based investing/savings
Here’s one way to think about the bear markets:
- Think long-term about crypto investments & avoid emotional decisions.
- Evaluate the fundamentals of an asset & if you believe in it, relative changes in price should not worry you too much.
- Leverage may not be a great idea in times of volatility.
- Always factor in your risk appetite.
As always, avoid acting on random tips or FOMO.