If you have been investing in cryptocurrencies for a while then surely you aren’t new to losing money to the volatile markets. If this is your first time, welcome to the club. There is some form of risk to any kind of investment and with crypto, the risks are significantly greater. The fact that you have lost money doesn’t mean that you have to lose your mind too. You need your wits about you. There is still money to be made. What exactly do you need to do?
- Resist the urge to act irrationally: Now is not the time to scramble around to buy or sell anything. You trade best when you can think clearly and if you are weighed down by your loss, you are more likely to make bad decisions. Don’t invest because of the fear. You should remember that “buy the dip” is not financial advice. This can lead to over-trading and scrambling to make up losses.
- Close Binance: Be it Binance, Kucoin or whatever broker you use, you may need to take a breather. Believe it or not, Bitcoin isn’t going to shoot for the sky if you close the app for a little while. In the hours you have spent starting at it, your investment has not doubled. It is time to rest.
- Assess the Situation: Think of the mistakes you made that cost you money. Did you sell too quickly or too slowly? Did you do enough research? Did you choose the right coin? Was your fundamental analysis on point? You need to re-evaluate your strategy, so you aren’t making the same mistakes over and again.
- Go outside and touch some grass: Not literally. Unless you really want to. What this means is that you need to stay away from technology for a bit. Go outside, take a walk, breathe in the fresh air. Talk to friends and family. It is easy to get stuck in the trading bubble, but sometimes you need to get back to reality.
- Diversify your Investments: To reiterate, cryptocurrency is very high risk. That shouldn’t be all that makes up your investment portfolio. This doesn’t mean different coins but different asset classes. Think stocks, bonds, fixed deposits and commodities.
Investing in cryptocurrency is risky and there is so much uncertainty around it. The surrounding hype is not enough reason to dive in head first, but losing money isn’t enough to dump it either. You need to do your research and keep your emotions in check no matter what. The most important advice in relation to cryptocurrency is never to invest money that you cannot afford to lose.
This article was written by Segun Kayode; connect with him on Instagram via here