How to Survive Crypto Winter?

For many people in 2021, crypto winter was a faraway thing. Nevertheless, there was a group of crypto enthusiasts who were divided intermediary into two portions. Some supported cryptocurrencies, whereas some supported bitcoins. The rest of the world thought the cryptocurrency market was a vast illusion that would collapse soon. Nevertheless, the crypto market fell sooner than they predicted.

The primary cryptocurrency started to decline at the beginning of 2022, beginning with protests in Kazakhstan and the conflict in Ukraine. It eventually fell to approximately $18,000–$19,000 per coin after losing 58% of its value.

As the prices of digital assets continue to decline, the bulk of cryptocurrency investors and holders have already been impacted by the crypto winter. Several projects have been falling apart, and a couple nearly vanished in hours.

After the drastic fall of the UST and Terra Ecosystem, many have to face liquefaction. After absolute suffering and facing tough times, Three Arrow Capital, a crypto hedge fund located in Singapore, has to liquidate following orders.

Crypto exchanges BlockFi and Voyager Digital also took out substantial lines of credit to survive the crisis. Three Arrows also received financial support from Voyager Digital. Sam Bankman-Fried, the owner of FTX and their creditor, asserted that several cryptocurrency exchanges are "secretly insolvent."

When asked about their words on these cases, experts say that history repeats itself and everything is cyclical. And this rule is not just applicable to the economic world but to life and history itself. At least two declines, or thereabouts "crypto winter" periods, have already occurred in the history of Bitcoin. The next one is expected to hit the world of economy.

Let's look at the bitcoin process's drop and cycle.

It is crucial to keep in mind that history repeats itself; therefore, to know the present and future of cryptocurrency, you need to keep a tab on everything that is happening. True, cryptocurrency has fallen drastically two times before; thus, this winter, it is expected to see the fall again. But you can not overlook that it has again risen in a more robust form.

You need to look at the phases of Bitcoin's movement between 2013 and 2017 to comprehend why it fell a few times. The most significant Bitcoin drop in 2013 was 85% and took 407 days. Likewise, the price of Bitcoin decreased by 84% in 364 days in 2017. According to Arcane Research experts, the recent decline lasted 229 days and saw a maximum loss of 73%.

In the coming days, there is a chance of a fall of 85%, but if it follows the previous cycle, it will bottom out at around $10,000 after the fourth quarter of 2022.

Many federal agencies, U.S. presidential election, and the stock market impact on bitcoin's performance is making its decline far more intertwined with the global market.

When compared with the last two declines, it is safe to say the present expected decline of the coming crypto winter is not that huge. Still, you need to take a break and very precisely look into every trade.

Following are some strategies that financial gurus advise using if you are in complete panic and terror.

Stop Panicking

Remember that we discuss the riskiest digital asset with significantly higher volatility than any other financial asset. After the last recession, the world is expecting a new hit in the economic world. Experts are naming it the crypto winter. Suppose there is any decline in the value of crypto assets. In that case, investors should be conservatively positioned, well-diversified, and well-diversified. You can think about purchasing more cryptocurrency at lower prices if you have the money and a healthy risk appetite.

Be Earful of the Risks

When we see the economy experts talking about real estate, economic fall, or crypto winter, there is calm on their faces. We must adopt the same calmness when discussing cryptocurrency and digital assets.

Every time you invest in a volatile asset, cryptocurrencies are at the top of the list; there is a low risk involved. However, the custody of the assets is another cryptocurrency risk that all investors should be aware of.

You can come around many platforms selling it with simple accounts and also offering custody. But in that case, you are not the digital asset owner. When the platform falls, your digital asset falls.

So, if you're interested in making long-term investments in cryptocurrency, think about finding out more about self-custody crypto wallets and transferring your digital assets to one.

Know Your Risk Tolerance Depth

Risk tolerance differs from person to person. That is the sole reason why investors are more inclined towards digital assets when other people decide to stay away from this volatile world.

You must have heard experts say you invest if you are prepared for the loss. If you have a low-risk tolerance, consider diversifying your investments. Yes, purchasing cryptocurrency assets directly from an exchange and storing them in your crypto wallet is the most direct approach to investing in cryptocurrencies. However, other options can limit your market exposure.

Wait for the storm to calm down, or maybe not

Investors who are easy with the losses say they buy when the blood is on the streets. But, do in-depth research before buying any asset. Though it is hard to say which asset is reliable to buy in the crypto winter, still rely on your research.

Face the crypto winter with calmness

Again, no source can tell you about the fall. But even under the crypto winter, innovations have not stopped taking place. So the future is bright for those who have the power to create utility and value.

Development on the metaverse is ongoing. NFTs are still a precious concept, and those projects that offer utility (like FootballCoin) will endure the bear market. Despite the slump, the framework for institutional investment in cryptocurrencies and digital assets is still being built.

Conclusion

The situation of crypto winter is inevitable. Instead of panicking and thinking about how digital assets will fall, you need to see the silver lining of this black cloud. At this time, only those who can think innovative and make opportunities in the tragedy will rise high

We recommend you research the assets you are going to invest in. Though the certainty is not there, if you rely on your research and face this time with rock head, you will rise and shine once the crypto winter is over.