Bigger Bitcoin Crash is Coming? No Good News?

It looks as though the market is perpetually on the verge of collapsing. Then, on an otherwise normal day, it begins, and everything begin to fall apart. I mean, cryptocurrencies are going down, equities are going down, and everyone is getting a little bit irritated about it. There is both good news and negative news associated with this development.

The bad news is… The positive aspect of this story is that Amazon stock lost 93 percent of its value in 2001. You would have received a return four hundred times larger now if you had purchased back then. Since the global financial crisis, stock prices have increased by 73%. As of today, Warren Buffett has at long last started spending his capital, which is an indication that value opportunities are just starting to become available.

Now is the time to ask yourself, “Do I want to sit on the sidelines during this bear market, or do I want to attempt to make the most of it?” If you’re still around, then it looks like it’s time to get started with this conversation. Before we can begin discussing methods for generating income, we first need to investigate the reasons for the widespread consensus that the year 2022 will be a poor one for financial markets.

First, we’re a touch behind due. During the past ten years, crypto has had significant highs and lows, whereas the stock market has, for the most part, been on an upward trend for almost twelve years. Therefore, it is most likely that a correction is long needed, and this is perfectly normal. Bear markets are a natural and inevitable element of the system. They occur frequently, and if you plan to put money into the stock market, you should expect to experience at least one of these drops in value at some point in the future.

However, uncertainty is the single most important element that is contributing to bear markets this year. People despise being in the dark. This is the reason why you would prefer it if your crush told you to simply F off instead of stringing you along and causing you to doubt who you are while you are trying to determine the right emoji usage. Just give it some thought. Right now, there is a great deal of unpredictability.

During a span of 22 months, the United States government printed 80 percent of all dollars in circulation. At its highest level in forty years, inflation. The supply chains were disrupted in 2020, never fully recovered, and then experienced dukey 2.0 as a direct result of the war that was going on at the time. The value of one of the most prominent cryptocurrencies plummeted to an all-time low, and housing prices are at an all-time high.

Things aren’t particularly certain, that much is clear. It doesn’t help matters that the media is obsessed with this kind of thing. They make the most money at times of upheaval, and we, being the gluttons that we are, enjoy it every single time it occurs. Therefore, within the context of a bear market, we need to make certain mental adjustments.

I try to keep in mind that there is really only one thing of which I can be absolutely certain, and that is uncertainty. I am not capable of predicting or controlling significant economic variables such as inflation, or, more crucially, Tweets from Elon Musk. Instead, I concentrate on what I am able to influence, which are the choices I make regarding my personal investments.

Because of this, understanding the psychology behind investing is of utmost significance. When you look at Netflix stock right now, you might be tempted to conclude that the company must be terrible. I have no intention of ever putting money into them. You might also look at it as one of the major media empires in the world making a little tweak in their business strategy in order to be more successful, which is leading it to be sold at a significant discount momentarily.

The same can be said about Bitcoin, which has dropped by more than fifty percent from its all-time high. When the price of bitcoin hit $69 000. Everyone wished they had bought some when it was only $30,000 per share. You asked for thirty thousand dollars, and here it is. So, what is your strategy going to be for approaching this market? At the very least since the 19th century, people have had a good understanding of the cycle that can lead to manic purchasing and even more manic selling.

Despite this, investors continue to go through the same old cycle, which consists of optimism, excessive investing, worry, and finally panic. It appears as though we are continuing to discuss a crush, but in 2022, let’s put an end to that pattern. The term “Research” is the most effective tool for calming the investing anxiety that’s building up in your head.

Conducting research is analogous to working out when it comes to investing. When the going gets tough, you’ll be much more confidence if you’ve already been there and done that. And once everything is said and done, you can review the study notes that led to your decision to risk everything. That is an investment that is being made here.

You can feel secure in the decisions you’ve made, and depending on the circumstances, you could even decide to make further purchases. Benjamin Graham served as a guide for Warren Buffett during his time as an investor; the two did not go out on dates. Buffett, in point of fact, did not experience any issues with the ladies. Inquire with either his wife or his girlfriend. Anyway, the individual who served as his guide penned a book titled “The Intelligent Investor.” Again, he does not tell us anything about dating or investing; instead, he informs us about this emotional and irrational character.

Mr. Market was the name of the guy in question. Every day, Mr. Market will yell at you the value that he assigns to your investments, which is solely depending on how he is feeling on that particular day. According to Graham, markets can be viewed as a voting machine in the short run. A scale will prove to be useful in the long term. This indicates that value, output, and utility will always be worth something, irrespective of the direction in which the currency moves or the state of the economy, at any given point in time. So it seems that we have finally gotten our bearings.

In these trying times, what practical steps can we take? The easiest strategy to implement is to confront the situation head-on without making any course adjustments. If you have been investing $100 every week in Bitcoin or the Nasdaq, there is no reason to cease doing so now when prices are falling because you clearly believe in the potential of these investments. In addition, this is not merely wishful thinking.

The duration of a bear market is typically much shorter than that of a bull market, and the losses incurred during the bad market are typically far less significant than the gains made during the subsequent bull market. The difficulty is that I don’t get that impression all the time. During a bear market, often known as a poor market, it may seem as though time passes more slowly.

If you have steel nerves and are able to ignore stories of impending doom and gloom, then you should just keep slogging along. It can be summed up like that. You might also go in the total opposite direction. Sell all you have, cut and go, and get some cash. David Wright, who manages funds for the company, is someone who has successfully navigated through several past bear markets without suffering even the slightest of physical injuries.

He use computer modelling to establish trailing stop losses, which cause positions to be liquidated and converted into cash if there is a decline in market prices. Now, similar to dating, this is far simpler to say than it is to execute because it almost always feels like things are ready to crash. However, it is possible to make this work.

When I think back to 2018, I can hear individuals saying more clearly than ever that the market is going to crash sooner or later. It is uncomfortably hot. Just look at what they’ve been missing out on. Even that portfolio manager, David, has certain shortcomings. Indeed, he has been successful in avoiding crises on multiple occasions.

However, at times of bullish market conditions, his fund typically performs worse than its competitors. Alternately, you could want to mix other methods. You can decide to sell some of your riskier investments in order to purchase some safer ones. These are the types of investments that continue to perform well even when the market begins to slug it out with you.

The fact that we will always require things like food, utilities, and healthcare helps ensure that certain industries continue to thrive during economic downturns. When things aren’t going well economically, interesting things can sometimes happen. Companies with poor business practises frequently fail to survive. Most respectable businesses either maintain their status quo or experience some degree of decline.

The reality is, however, that excellent businesses actually thrive during economic downturns. This is because, when their competitors experience setbacks, they are able to expand their customer base and grow even more powerful. This is true not only for stocks but also for cryptocurrencies. Therefore, the current moment is probably not the greatest time to put money into meme coins. In the world of cryptocurrencies, I’ve recently been experimenting with something that’s known as a dual investment bot. When the market conditions are less than optimal, this strategy might be used to generate profits.

Therefore, there is no reason not to put it to the test. What is being communicated here is that although I am interested in purchasing some Bitcoin, I do not intend to do it on the open market because I am aware that I will be compensated if I wait. Consequently, in this illustration, you are essentially saying that I am willing to purchase Bitcoin at the price of $27,000 if it does in fact go lower than $27,000. At the time that the contract is terminated, I will receive Bitcoin at the price of $27,000 plus the premium settlement cost, which will be 0.05 percent in this instance.

That’s the return for just one day. If the price remains above $27,000 for an extended period of time, I will not purchase any Bitcoin and will instead merely get the settlement fee in USDT. After then, I’ll be able to keep doing it over and over again and continuing collecting payments until a contract is finally settled. Now, the reason why there is an additional cost for the settlement is because I am taking on some risk.

In this scenario, if Bitcoin’s price drops to $26,000 when the contract expires, it would mean that I would pay $27,000 to purchase $26,000 worth of Bitcoin. In this scenario, you are not exactly going to incur a financial loss, but you will be making a less favourable trade. On the other hand, if you anticipate that Bitcoin prices won’t likely go up, you can put up Bitcoin and receive a premium, which is ideal for when the market is performing poorly. This statement is simply indicating that I own some Bitcoin, and I have no problem with the price of $30,000 for selling it.

On the other hand, I’m not particularly certain that it will reach $30,000 in a single day when the transaction is finally closed. If it continues to trade below 30, I will keep my Bitcoin and get a tidy 0.37 percent fee in one day, which works out to a compound annual growth rate of 200 percent.

If the contract settles at a price higher than 30,000, I will sell my Bitcoin for 30,000 while maintaining the same fee structure. The potential downside to this scenario is that even if Bitcoin’s price reaches $31,000 or more, I still have to sell it for $30. Therefore, this may be an excellent approach to simultaneously protect your investment portfolio and produce money in a passive manner.

Now, commodities can also have an effect on stock prices, though their influence is limited to a certain degree. When we consider the psychological factors involved, it makes perfect sense that the prices of commodities will surge right at the start of a panic and then soon return to their normal levels. People are most likely to consider stockpiling food, water, and other necessities during the start of a terrifying event.

This is also the time when they are most likely to take action. It’s the same as when stores ran out of toilet paper during the pandemic; those are basically just commodities. Now, some people have suggested that Bitcoin is a safe haven from stocks, although opinions are extremely divided over this topic. If we take a look at this chart, we can see that Bitcoin, which is depicted in black, appears to have a rather strong correlation with both equities and bonds, which are shown in red and green, respectively.

It would indicate that gold that is yellow has a negative link with the overall lot. Following this story over the next ten years or so should prove to be very intriguing. Will there be less of a correlation between Bitcoin and stock prices as time goes on and more and more people start using Bitcoin? The only way to know is to wait. Now, bear markets provide a significant obstacle for Bitcoin, and gold actually faces the same challenge in these situations.

It does not generate any monetary value. This is the primary advantage that stocks and investment real estate possess over other types of investments. In times of panic, a venture capitalist can always look to the cash that a business is generating and be relaxed with investing at lower prices because, hey, they’re just going to get paid more cash per dollar that they invest. This allows the rational investor to feel comfortable investing at lower prices.

Bitcoin and gold do not follow this pattern at all. It is true that they have some use, which indicates that they have some value; yet, it is difficult to dispute whether or not Bitcoin ought to be valued $30,000 or $100,000. The case can be made for any of the prices using essentially the same evidence. In light of all that is occurring in the globe right now, here is what I am doing to protect myself from the current bear market.

I’m going over all of my investments one by one to determine which ones are the most robust and which ones are the most vulnerable. It is not the time to put money into companies with a low market value. I’m using market-neutral tactics such as bots selling options and lending out stablecoins, and I’m also keeping a watch out for once-in-a-decade possibilities to make value investments.

We are discussing straightforward companies that generate constant amounts of cash and have a competitive moat that is extremely difficult to breach. Every point that the market loses is just another opportunity for people like you and me to get our hands on incredible bargains. I made many large purchases during the pandemic sell-off, and looking back, those were some of the best transactions I’ve ever made.

There are many hackers operating in the cryptocurrency industry, and not all of them are going to have noble intentions like that one hacker who stole $600 million and then donated it all back. I mean, if you’re going to steal money, why not steal money that can’t be traced back to you? There’s nothing more attractive to a hacker than that.

Two-factor authentication, also known as 2FA, is a security feature that is both one of the easiest to use and one of the most effective ways to protect your online account from being compromised. You are putting yourself in danger if you don’t make use of it, as every exchange has it. If you are unfamiliar with what two-factor authentication (2FA) is, it refers to a sort of security that requires you to provide evidence of your identity in two different ways before granting you access to your account.

The majority of the time, a text message code is constructed for this, although even it doesn’t work well. Therefore, installing an authenticator tool such as Google Authenticator is something that comes highly recommended by me. These programmes generate a fresh code for you to enter into the website that you are logging into every few seconds, and you do so using the code. If you have this security measure in place, the only way for someone to access your account is if they have both your password and your phone in their possession at the same time.

And if we’re being completely candid, if someone has both of those things, you’ve got larger problems to worry about. Whatever it is that you want to accomplish, you should decide on it in advance so that you can formulate an investing strategy that makes sense.

Let’s imagine you want to build up that portfolio over the course of many years. Investing $100 per week in Ethereum and Bitcoin would be one method to get closer to reaching that target. In addition to this, your strategy can state that even if the price of cryptocurrency falls by thirty percent in a single day, you won’t sell any of it but instead will increase the amount that you invest in it by threefold to $300 for the following week.

The important thing to keep in mind is. Because we can not know what the future will bring, there is no plan that can be considered flawless. The most important thing is to establish guidelines for yourself. When faced with a decision involving a grey area, humans, including myself (I know, I’m terrible at this), will go with our gut reaction when the time comes. If your objective is to perhaps buy $100 a week, you are not going to buy $100 a week. Even if it’s just a possibility. Let’s be honest.

Create a strategy for yourself and commit to following it until you feel ready to make a change in your approach, at which point you should commit to following the revised plan. The issue is as follows. People invest in cryptocurrencies without having a strategy in mind, in the vain hope that their returns will be unlimited. The next morning, they discover that their portfolio has decreased by 15%. These individuals are considerably more inclined to act irrationally and sell right now, which is the worst possible time to do so.

Therefore, establish a goal and a plan. Simply putting it in writing will immediately elevate your investor skills to a higher level. What do you call it when you spread out your cryptocurrency purchases over a period of time and pay $25 for it? Despite the fact that Doge’s market value as a whole is three times bigger than Chainlink’s, the price of a single coin in Doge is significantly less than what it is in Chainlink.

New projects, particularly meme currencies, will frequently have billions or trillions of tokens in their supply. This is done so that individuals will get the impression that they are getting in on the ground floor when, in reality, they are not. Let’s test Dan to see if he understands the distinction, What’s the difference between market cap and pricing for a stock that costs $50? — Price refers to the value of the asset at the time when this discussion is taking place.

The total amount of money that has been merged is the market cap. Would you like to elaborate on that further? To be honest, no. because you had already been planning to say that, and it sounds fairly nice to me. You are currently sitting there scrolling down to the tenth page of CoinMarketCap, and you come across a cryptocurrency that has a market cap of $500,000.

When you look over to Bitcoin, you see that its market worth is between $700 and 800 billion. Could you multiply that amount of money by 1.6 million? In an academic sense, absolutely. But no. A significant majority of coins that rank in the top 100 or so will eventually be removed from circulation at some point. On the other hand, you might be thinking that Shiba exploded. The value of dogecoin soared.

What if I pick the one after that which performs the same function? You are able to, but it is quite improbable that you will. We have to keep our expectations in check. The so-called survivorship bias is something that needs to be taken into consideration. The main reason we hear about projects that fail to materialise is that they fail to materialise.

It would appear that there is a never-ending stream of projects that are failing. In point of fact, though, we simply do not hear about the 10,000 programmes that were not successful in reaching the moon. Moonshot bets can, of course, find a home in a portfolio, but the proportion of capital devoted to them should be extremely, extremely low.

Donate $75 to a good cause and What was the total amount of money that was lost due to crypto scam rug pulls in 2018? You do not only need to be concerned about con artists stealing your money because you are also capable of making a full mess of things for yourself.

Transactions made with a cryptocurrency are intended to be permanent and cannot be undone. This ensures that no single entity can exert control over the entirety of a network. Someone have the ability to undo financial transactions. This would be counterproductive to the overall goal of decentralisation. However, this has an unintended and bad effect.

If you send cryptocurrency to the wrong address, there is a chance that it will be lost permanently. It is usually recommended that you conduct a test transaction before sending a significant quantity of money. You might also avoid making mistakes by just copying and pasting wallet addresses using a QR code scanner, which is preferable than the alternative of writing them down manually. Mistakes happen.

Always perform a thorough check, then a triple check, of the addresses on your wallet. $125 will be donated to charity if you are successful, If you do not understand this, however, there is a catch. You need to get into a squat position on this chair in order to answer the remaining questions. Regrettably, erroneous wallet addresses are not the only way in which you can become your own worst enemy when dealing with cryptocurrencies. When it comes to the stock market, buying and selling is not a good idea because it quickly builds up your tax liabilities, which can significantly reduce the amount of money you make from trading.

When it comes to crypto, this is an even more terrible plan. In addition to having to pay that hefty tax bill, you will also have to shell out a significant amount of money in fines and penalties, which can have a significant impact. Let’s imagine you put $100 into an investment and it increased by 30% to $130, at which point you decided to cash out.

You have made a profit of $30, which means that you owe Uncle Sam a short-term capital gains tax on that amount, which is probably somewhere in the neighbourhood of 20 percent, in addition to a couple of dollars in transaction fees. Although Uncle Sam gives you the thumbs up, this quickly turns into a pay up because you have to pay transaction fees of a couple of dollars. That brings your total down to $22 from $30. And that’s just one transaction among many.

Let’s imagine you successfully completed a few deals and are feeling confident about your abilities as a result. You make the decision to utilise leverage. Leverage, on the other hand, carries no inherent moral value. Simply put, it’s a tremendous instrument, one of the most powerful tools available to investors.

This is a situation in which you borrow money in order to enhance the exposure of an investment, and a great number of investors have been caught in this trap before fully comprehending the true ramifications of using leverage. For $175, Some people would consider this to be obvious, but you wouldn’t believe the number of times it’s been used to con individuals out of their money.

The question is, once I discovered the identity of the person impersonating as me in a cryptocurrency fraud, how much money did I locate in their wallet? That’s not correct, 2 million dollars. Your consolation reward is in the mail. Did I get it right? No. Imagine for a moment supposing I informed you that even bogus scam accounts are not the sole problem. Using real influencer accounts can end up costing you a significant amount of money.

Cryptocurrency is continuously gaining popularity, despite the fact that it is still mainly uncontrolled. For instance, it is extremely against the law to promote stocks without first providing a comprehensive disclosure. When it comes to crypto, this is somewhat of a muddled area.

I instance, not so long ago, Kim Kardashian, who has a quarter of a billion followers, pushed Ethereum Max on her story, which hasn’t exactly performed so well over the course of the last couple of months. I should clarify that this is a completely unrelated event. You get the idea; the coin might not actually be a fake, but it fits the bill. Everyone from online gamers and streamers to adult celebrities has experimented with incorrect financial advice at some point in their careers.

Sapping the financial resources of their audience Do your own research no matter who tells you what because that is the lesson to be learned from this narrative. In addition, conducting your own research will instil confidence in the decisions you make regarding your finances. because you have your own reasons for making the purchase, rather than simply following someone else’s advice.

Originally published @ https://briankramerr.medium.com/bigger-crash-is-coming-no-good-news-f6ac4c034759