Despite the fact that: Metaverse News: is a new media, the people that run it, such as our Editor-in-Chief: Jonathan:, are no strangers to the cryptocurrency sector. As a matter of fact, we have witnessed everything from bear markets to bull markets, as well as everything in between. We have a great deal of knowledge and experience, but what can be done to emotionally prepare for the upcoming chilly winter season is debatable. Trezor, the company that makes the hardware wallet, has created an excellent guide, which we have reprinted below in a heavily altered version.
Over the past few years, the most effective method for building a strong Bitcoin position has been to dollar-cost-average (DCA) – that is, to buy bitcoin on a regular basis, regardless of where the price is at the time. The following is an illustration of the same USD 2,100 investment, which can be deployed either in a lump payment or in a DCA (USD 10 purchases every week) pattern, starting from the ATH of USD 19,500 in 2017.
In essence, taking the DCA technique means saving in bitcoin, so protecting the long-term purchase power of your profits in a worldwide neutral currency that is not subject to inflation. In this technique, the most significant benefit is a shift in your mentality: you no longer worry about the volatility and shifting worth of your stack in currency terms; instead, you exult in the ever-increasing amount of bitcoin in your wallet. Given that DCA needs a long-term perspective, it prevents you from panicking over large price declines – to a certain extent, you begin to welcome such opportunities for bargain-basement accumulating! Because of the growing popularity of the DCA strategy, several bitcoin-centric solutions are now supporting it. Trezor users will soon be able to DCA with Invity, the Trezor Suite-native exchange aggregator, because it now allows DCA for all of its customers!
There are a few more crucial rules to follow in order to travel successfully through the next bear market, besides than DCA:
The satoshi way of thinking. We are accustomed to recording transactions in complete bitcoins, but did you realize that one bitcoin contains 100 million satoshis? Switching to a satoshi mindset is quite beneficial in terms of appreciating how much bitcoin you actually have. Being a millionaire sounds better than owning a million dollars, doesn’t it? Keeping track of every satoshi in your wallet is important; if you look after them, they will look after you in the future.
Do not engage in trading:. First-time traders typically attempt to “buy low and sell high,” as the saying goes. However, they wind up doing the polar opposite of what they intended because their emotions get in the way. Trading is an extremely stressful zero-sum game in which the majority of people lose their money: according to a recent Business Insider story, between 70 and 97 percent of day traders lose their money! Trading exchanges and only experienced traders (who have learned their lessons the hard way) are able to make a profit.
Do not leave your coins on exchanges until absolutely necessary:. During a turbulent period, such as a raging bear market, it is possible for exchanges to become bankrupt. This has happened numerous times in the past, with Mt Gox, QuadrigaCX, and Cryptopia being just a few of the most notable examples. Nothing – nothing – about your keys or coins is ever a valid argument. If you want to be safe, use an open-source hardware wallet such as the Trezor, which has been battle-tested.
In the short term, do not put your faith in Bitcoin pumping:. Any ambitions you have for your personal or professional life that are contingent on bitcoin pumping may be setting yourself up for a major letdown. It is important to remember that a bear market might occur at any time. Make sure you do not retain all of your money in bitcoin if you need it to pay for immediate personal or business expenditures.
Instead of obsessing over all-time highs, consider the yearly lows for a change:. This shift in perspective should make it abundantly clear that Bitcoin has made enormous strides over the years, despite the fact that it has been a rocky road at times.