The investment gameplay in cryptocurrency is not just fast in and fast out!

Lie to me once, you have no shame. Lied to me twice, you are amazing. Lie to me three times, that's why the crypto game is going on right now, and it's not without my support.

According to bi123.co data to see the trend of the big pie, it is also confusing. You think the bull market is back, but suddenly there is a sharp drop.

Judging from the latest fear and greed index, the comparative currency has shown fear for many consecutive weeks.

Reasons for sharp movements in cryptocurrencies

The recent encryption market seems to have spent all the luck it has accumulated before. Bad things come together. First, LUNA directly collapsed the entire encryption game, which directly caused a loss of more than 40 billion U.S. dollars. However, this incident was catastrophic for the entire market, and even the impact of more than 400 billion U.S. dollars was not limited. Therefore, later we saw that various previously optimistic coins fell by more than 50%, such as GAL, FIL, etc.

In addition to the incentives of the LUNA incident, the crypto market has been on a roller coaster ride lately, with sharp rises and falls. Of course, in addition to the shutdown of the entire economy caused by the new crown, the continued uncertainty of the war with Russia and Ukraine has led to a downturn in global stock markets, and the Fed has raised interest rates. Even, there are some countries that have cracked down on cryptocurrencies and are not optimistic for a long time, such as my country and Russia. There are too many of these two superpowers, which also gradually depreciate cryptocurrencies.

There is also a part of the reason. In recent years, we can often see some traditional financial organizations entering the Bitcoin market, but for them, BTC is just a kind of asset allocation. When the global economic market is sluggish, they are the first to sell These tokens are the most important, which can be regarded as the status quo that causes the Bitcoin market to follow the trend of the US stock market.

clean up bad players

Considering the entire encryption market, to be honest, this crash may be a good thing, which will help the entire cryptocurrency market to clean up those "speculative" people.

During the bull market, when your eyes are full of greenery, no one will think about innovation and construction. Everyone only wants to make money, but this is unhealthy and irrational in the market. Kind of reckless. Therefore, at this time, it needs to be corrected and returned to a normal and healthy market.

During the bear market, when those good and bad projects are eliminated by the market. Only at this time can developers calm down and focus on construction, innovation in new markets and new projects, rather than the valuation of project tokens. Therefore, I think this is a good time to help the encryption market clean up those bad players, set things right, and focus on construction.

When the market returns to health and stability, when there are no violent fluctuations in the market, and when words such as "slump" and "crash" don't appear in the headlines of the news, it's time for us to learn to invest for the long term, instead of the usual fast-in and fast-out strategies. Law.

Learn to invest for the long term

While there has been a broader decline in risky assets such as equities, it has had a greater impact on cryptocurrencies than it has in the past, because if assets are to be sold, cryptocurrencies must be in the top three positions. Therefore, at this time, we must take a long-term view. About two years ago, Bitcoin was still at $8,000, and now it is over $30,000. Even if there is a crash, when you zoom out further and look at the long-term trends, I think there is still a future for good cryptocurrencies.

Looking at the past, we will find a rare thing, that is, there has never been a moment in history when stocks, bonds and cash were all affected by current market conditions. Although every investor in this market is more or less adversely affected by the current market, there is one group of people who have been hurt more than anyone else, and that is young investors, commonly known as new leeks.

A disproportionate number of young investors have joined the cryptocurrency boom, which has taught them a hard lesson. As the cryptocurrency market crashed over the past few months, they found out that the tokens they invested in were now worthless. Some investors even use credit cards to cash out, or take out loans to buy cryptocurrency assets, which undoubtedly increases the debt burden of these people, and makes families who are not rich even worse.

Young investors, having experienced the current encryption market, made them feel at a loss and confused about investment, and these people did not seriously reflect on it, and did not take this experience as an investment lesson, learn from the lessons, and make themselves better in the future. good investor. Therefore, the following two points, whether for young investors or investors with some experience, can be read.

First, portfolio diversification. There is an old saying in China, never put all your eggs in one basket. In the cryptocurrency market, this statement is especially important. Many inexperienced investors invest most of their funds in the cryptocurrency field, which is quite dangerous. Once the project explodes, the entire fund will be wiped out. Liquidation is also a common thing in cryptocurrency.

Therefore, we must diversify our investments and disperse risks into various investments, so your losses on any investment are limited. By having a diversified portfolio, you can reduce the volatility of your overall portfolio. Of course, this doesn't mean that you can't lose money on a diversified portfolio, and that investors with a diversified portfolio will even get hurt, but it does protect us in the long run.

Second and most importantly, DYOR=Do Your Own Research. It means that you need to do your own research and be responsible to yourself before making any investment or transaction. Before we invest in a project, in addition to some fundamental investigations, such as the team, social media, market value, etc., we also need to conduct other investigations to understand whether the project logic works; this technology can bring the public What kind of convenience is it, is it adding bricks and tiles to the industry, or adding obstacles to the industry. Only when we thoroughly study the project can we make more accurate investment instead of following blindly.

write at the end

Many investors jump into the cryptocurrency space with the idea of making a quick buck, but I would say that if you invest to make a quick buck, you can lose it faster. Investing is not a quick money-making strategy, but a long-term process. The lesson I hope everyone takes away from this cryptocurrency crash is that you should never gamble with your investment capital.

Too many investors never consider the risks associated with cryptocurrencies. They just see the token price go up quickly and think it will never go down. Every investment has risks. Before investing, you must have sufficient understanding of the field you are investing in. Finally, I hope that those who have lost their funds in the cryptocurrency market will not be bored with investing. Investing is an important skill in our day-to-day life that can brighten our financial future. Mostly, learn from your mistakes and become a better investor.

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The above views represent the views of the author only, not the views of the platform. Investment is risky, please invest carefully! bi123.co is committed to researching market conditions, new projects, trend signals, NFT and deeper logic on the premise of respecting the market, saying goodbye to being a leek that lies flat.

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