It might be tempting to try to make sense of the volatility of the crypto markets but it’s going to leave you disappointed. Instead of wasting your time and energy looking for a crystal ball that doesn’t exist, you might be better off figuring out how you can protect your current investment.
You can protect your current investment by not putting all your eggs in one basket, instead you want to diversify your portfolio to mitigate risk. It’s important to have your money in assets that aren’t going to react the same way to economic indicators or news. For example, let’s say that all of your money is in cryptocurrency, and tomorrow a government in Europe announces that they are banning all blockchain investing, this news would have heavy consequences for the crypto markets and your entire investment would suffer losses.
If you diversify your investment portfolio even when bad news hits wall street or the crypto markets not all is lost–because you have other investments that will be thriving. Good hedging doesn’t require that you invest in assets that have an inverse relationship with each other, but it can help.
You might have heard of different ways to profit in a crypto market crash but most of these ideas are at best speculative, and at worst are flat out dangerous even for an expert. Some of these ideas include:
1.Buy the dips (Increasing a position after a significant dip)
2.Investing in only winners (Forecasting into the future which companies will be winners)
3.HODL (Hold on for dear life)
The problem with each one of these strategies is it includes a huge amount of speculation– meaning it’s very risky. When you look at “buying the dips” this strategy is successful for some in the stock market when they follow specific stocks and understands the trends, but the crypto markets are a completely different animal that doesn’t quite have the maturity to know when and if the market will come back up.
Both investing in winners and Holding on to dear life can work over the long run; however, the odds are stacked against you. If you do have the mental fortitude to hold for the long term you very well could end up with gains, but if you don’t have the patience or outlook for the long haul you should find another strategy.
Invest in tokenized real estateFor many the best strategy is to have multiple investments in a diversified portfolio, this way when one investment is down the other could be up, and vice versa. Real estate is a great way to diversify your portfolio because its unrelated to the stock market with its upswings and downswings but steadily climbs upward in the US market.
Smart investors will have their money in real estate for three primary reasons: (1) real estate has been predictable and less volatile than equities, meaning that investors understand the risks better and can forecast their returns; (2) real estate provides cash flow from income producing properties; (3) real estate appreciates over time allowing your equity to grow.
Not only is their safety and growth in real-state, but for the first time there will be opportunity to invest in fractionalized real-estate ownership through ETH. People from around the globe can take their ETH and invest in US real-estate with companies like RealtyReturns. This unique opportunity gives ETH holders access to cash-flow properties and potential capital appreciation over time. Most importantly, there is a long track record of growth in the US real-estate market with no signs of that changing.
RealtyReturns is democratizing real estate investing by offering cross-border real estate transactions through their online portal. Regular people can invest in real estate through their ERC-20 compliant security tokens. The integration of the blockchain into the traditional real estate investing model provides asset-back tokens and liquidity to investors all across the globe. Each token represents legal ownership in fractional real estate with access to income generating properties and capital appreciation.
