5 Crypto Tips to Survive the Altcoin Crash Season
Altcoins once again took a beating, showing that the April and May bull market was a temporary phenomenon. Now, valuations could go even lower before recovery, and for some alts, the hope may never return. The Bitcoin (BTC) market price hovers just above $6,000 after dipping below that level, but altcoins have seen even deeper cuts.
However, as assets return to prices not seen in a year, and some ICOs go back to their initial selling price, there are opportunities to achieve a new wave of gains. Altcoins are at the moment extremely risky, but the possibility of returns is always there – mixed with risks of rapid selling.
For those that want to build from the ground up, the coming weeks, or even months of a bear market may present several opportunities.
The $100 Investment: While in December and January investors were willing to take out a loan and buy crypto assets, this can take you to disastrous results. In the past, crypto buying and selling were mostly done with “betting money”, a sum that one could afford to lose. Now that valuations are 85%, or even more than 90% lower than peak prices, some assets look affordable for a small-scale investment that may pay out. Choosing relatively low-priced coins now may be a good stepping stone. In 2017, newcomer investors started with as low as $20 on a coin, which in some lucky cases turned into thousands of dollars.
Investing in Nodes: This is where cheap altcoins get interesting. Because mining is seen as an ecological disaster, there are coins with elaborate staking systems. After the most recent crash in prices, owning enough coins to run some types of nodes has become more accessible. For VeChain (VET), running a starter node is now 5 to 8 times cheaper compared to peak prices at the current level of $0.0068 for the VET asset. Choosing a handful of coins for staking may mean higher rewards. Quality projects include Stratis (STRAT), but also Ontology (ONT), and now an even more affordable NEO (NEO), paying out GAS.
Hurry Up and Wait: This is a strategy for a protracted bear market, as well as overheated price movements. The world of crypto coins is volatile, and it may be advisable to merely monitor a handful of assets to get a feel of their price behavior over time. Using apps like Robinhood, or Blockfolio, it is possible to create a virtual portfolio. Test the market before investing funds.
Use Freebies: Much better to test crypto trading with the bank’s money. Airdrops may be a suitable tool to test trading and investing, though on a very small scale. However, playing with a brand-new asset to make risky bets may be more suitable, as prices have not bottomed out yet. Ideally, trades may finish by converting to fiat, or fiat-like positions in fixed-priced assets.
Stablecoins and Exchange Coins: Choosing a selection of stablecoins and exchange coins may be useful in waiting out the current slump in altcoin prices. Stablecoins are seen as risky, but their value remains stable over time.
However, even with stablecoins, there is always the advice to keep a part of the portfolio in BTC, and avoid going all in into altcoins. While some altcoin projects are solid and promising, the fact that they are traded against BTC means that their price may be depressed, once the support of BTC owners disappears.