Best Practices for Bitcoin & Altcoin Traders — Quick Guide 3/3

Feeling restless because of the volatile crypto market? Thinking of selling before it’s too late? You’re not the only one: Every day, thousands of Bitcoin traders make decisions based on uncertainty. Get a peace of mind: Read the third and last chapter of our free Quick Guide to Crypto › (pdf). Below you’ll learn about the best Practices for Bitcoin & Altcoin Traders in a nutshell:

 

 

Let’s take good old RIPPLE (XRP) as an example for today’s blog post: Its price per coin went through the roof in December 2017, showing an impressive increase of 1250%. This growth secured Ripple the 2nd spot in the Top 10 Cryptocurrencies. Investors were already scouting the websites of Lamborghini dealers, Ripple was going “to the moon” !

 

And then came the disappointment

Many people bought into Ripple believing Coinbase, the world’s biggest exchange platform, would soon add the currency to their portfolio. When Coinbase released a statement on their blog that many people interpreted as a clear “we’re not going to add Ripple anytime soon”, panic spread like a wildfire. Although Coinbase never mentioned Ripple by name, the damage was already done: XRP went into freefall.

 

From our blog post Best Pracites for Bitcoin & Altcoins

Best Practices for Bitcoin and Altcoins: Don’t mistake a dip for a crash

 

But it wasn’t a crash: It was just a dip

By the time Ripple lost 5%, many investors thought this was the end of a shortlived hype and they just wanted to get out. Pronto! As more people sold, Ripple’s value went down even further. “Sell, sell, sell!” was the conseil du jour on eToro and various facebook groups. The “I told you so” prophets came out of the woodworks, proclaiming Ripple was nothing but a sham. Some even compared it to the Dutch Tulip Mania, instilling further distrust in a currency that has shown great potential and corresponding growth in 2017. Now ask yourself: Is it really in your best interest to close a position just because of a temporary dip?

 

One man’s loss is another man’s profit

“Christmas came early this year: Buying before the rocket takes off again!” was one of my favourite comments on eToro. Oh yes, this savvy trader saw the dip for what it really was: An opportunity to buy, taking advantage of your knee-jerk sales. Ripple stood proud and tall at $3.30 per coin on Tuesday 2 January, a far cry from its modest price point of $0.20 on 2 December. And just because one platform releases an ambiguous statement about their vetting process for new coins, you immediately dump your XRP? Why, of course Coinbase would post something like that on their blog: This is the same platform that got accused of insider trading when they added Bitcoin Cash just one month ago! They are playing their cards close to the chest – wouldn’t you?

But that’s okay. Go ahead and sell your Ripples. If losing out on good profits doesn’t keep you awake at night, go for it. You have done your fellow traders a great service. Those who didn’t get scared by a meagre blog post saw your trash for what it really was: A treasure.

 

 

The only way is up: Don’t miss the boat

By the time of writing, XRP bounced back to a healthy $3.10. Remember that $0.20 on 2 December? That’s right: XRP is going strong and although it probably will never be the number 1 cryptocurrency, it makes for a very healthy contender. Feeling sick already about your panic move? Don’t worry, we all make mistakes and you’re not the first nor the last person to sell on a whim. But don’t you ever forget: Once you close a position, you close a chapter. You will never jump the bandwagon again for only $0.35 per coin. You will be forced to reinvest at a higher rate, cannibalising profits that could have been.

 

Hodl on for dear life

Assuming you did your research before you invested your hard-earned savings, you should have (and keep!) faith in your portfolio. Don’t get distracted by all the self-proclaimed experts, don’t believe anything you read. Double check every story and fact check every tweet. Always ask yourself: Who could benefit from this statement? The truth is usually staring you in the face, but we tend to get blinded by FOMO (fear of missing out), FUD (fear, uncertainty, and doubt) and our own bias and greed. The best advice I can give you: Don’t panic. Hold your position, check Mondex.co for the latest median rates and trust your own instincts. Stay clearheaded – Your money is on the line!

 

 

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2 Responses

  1. John Maher says:

    Great advice and as I am (at the moment), a long-term investor at this early stage, I am enjoying the excitement of the chase.

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