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Richard Donchian said, “Trading is trading, and the name of the game is increasing your wealth. A trader’s job description is stunningly simple: Don’t lose money.” As Ethereum and Bitcoin prices continue to be in cutthroat competition, every BTC trader’s worst nightmare is the Bitcoin markets crashing, with prices submerging!
However, Bitcoin market crashes are just part and parcel of investing. Even though ardent fans might contest this, it is no lie that Bitcoin prices tumble and skyrocket, leaving one wondering how long the scales will tip in their favor.
We understand how stressful it can be to see the Bitcoin market crashing and scratching your head attempting to make Bitcoin price predictions.
Hence, here’s what you can resort to when the Bitcoin market crashes.
Sit back, do nothing –
Sometimes, not doing anything is the best way to do something. No matter how tempted you’re to act impulsively seeing the Bitcoin market crash, we suggest that you breathe and relax.
Fluctuations are intrinsic in the stock market. Though the market suddenly crashing can be terrifying, it doesn’t imply you’ve to do something after a Bitcoin price drop.
You might end up doing more harm than good, given that it’s almost impossible to make accurate Bitcoin price predictions.
Don’t sell.
“Buy low, sell high” is a rampant saying in the investing world.
The Bitcoin markets crashing naturally cause a depreciation in the asset’s value, especially the Bitcoin price.
Selling at this point might be profitable to some. However, there’s no thumb rule for this.
Critically analyze your situation and take the step you deem fit, not necessarily following the herd.
Buy
Bitcoin markets crashing can also be good for you. You can buy this promising asset during trying times in the market.
In case you had your eyes set on Bitcoin price lowering, frantically checking its charts, making innumerable Bitcoin price predictions, doing your research, then buying it might be an excellent idea for you!
Nevertheless, keep in mind that the global trend in the dipping Bitcoin price can render it all useless.
Readjust your portfolio
Before you just jump into this, we advise you to wait till the market stabilizes.
Once the Bitcoin market crashing stops, assess the damage to your assets. Look at your investments and deduce how much they’ve been affected.
Both the flawed or powerful areas can be opportunities in disguise for you to invest and revamp your portfolio, making most of the Bitcoin market crashes.
Exit to fiat or stablecoin.
Whether you predict the Bitcoin market crashing or not, you can always consider converting your cryptocurrency to fiat currencies or, better yet, stablecoins.
Wazirx offers you a myriad of fiat currencies to choose from as you wage war against volatility.
Experts suggest that you time your exit from and entry into the market well, along with calculated Bitcoin price predictions.
The best bet is setting aside the money you can risk and then sticking to your plan despite the fluctuations during the Bitcoin market crash.
Go short
Turn to this method only if you’re a seasoned trader. Some exchanges offer “shorting Bitcoin” as an option.
To short Bitcoin, all you’ve to do is contact a trading agency/platform and place a short sell order when the Bitcoin market crashes harm everyone. The agency you chose then sells Bitcoins from their reserve, assuming that you’ll pay them an equal amount of BTC in the future.
Bitcoin price movements show that it is emerging as an asset of value in the future, irrespective of the uncommon Bitcoin market crashes.
While the above strategies are best among the rest, we would still say that you perform your due diligence before blindly using any strategy to benefit from a Bitcoin market crash.
Frequently Asked Questions
What Are The Chances Of Bitcoin Crashing?
Two Yale University economists (Yukun Liu and Aleh Tsyvinski) produced research titled "Risks and Returns of Cryptocurrency" in 2018. They looked at the possibility of Bitcoin crashing to zero in a single day. The authors discovered that the chances of an undefined tragedy crashing Bitcoin to zero ranged from 0 percent to 1.3 percent and was around 0.4 percent at the time of publishing, using Bitcoin's history returns to determine its risk-neutral disaster probability. Others claim that because Bitcoin has no intrinsic value, it will inevitably crash to zero. On the other hand, Bitcoin advocates argue that the currency is backed by customer confidence and mathematics.
How Does Bitcoin Work?
The blockchain, a distributed digital ledger, is what Bitcoin is based on. As the name suggests, blockchain is a linked database made up of blocks that store information about each transaction, such as the date and time, total amount, buyer and seller, and a unique identifier for each exchange. Entries are linked in chronological order to form a digital blockchain. Entries are linked in chronological order to form a digital blockchain. Blockchain is decentralized, which means any central authority does not control it.
How Bitcoin Works?
Bitcoin is based on the blockchain, a distributed digital ledger. As the name implies, blockchain is a connected database made up of blocks that hold information about each transaction, such as the date and time, total value, buyer and seller, and a unique identifier for each exchange. Entries are linked in chronological sequence, forming a digital chain of blocks. Blockchain is decentralized, meaning a centralized institution does not own it
Is Bitcoin And Cryptocurrency The Same Thing?
Bitcoin is a cryptocurrency that was designed to facilitate cross-border transactions, eliminate government control over transactions, and streamline the entire process without third-party intermediaries. The absence of intermediaries has resulted in a significant reduction in transaction costs. Satoshi Nakamoto, the creator of Bitcoin, created the first cryptocurrency in 2008. It began as open-source software for money transfers. Since then, plenty of cryptocurrencies have emerged, with some focusing on specific fields.
How Many Bitcoins Will Ever Be Created?
The source code of Bitcoin stipulates that it must have a restricted and finite quantity. As a result, only 21 million Bitcoins will ever be generated. These Bitcoins are added to the Bitcoin supply at a predetermined rate of one block every ten minutes on average. The supply of Bitcoins will be depleted once miners have unlocked this number of Bitcoins. It's possible, however, that the protocol for Bitcoin will be altered to allow for a higher supply.
Can Bitcoin Be Converted To Real Money?
Crypto exchanges, Bitcoin ATMs, Bitcoin Debit Cards, and Peer Peer Transactions are all options for converting Bitcoin to cash. This can be accomplished by using Bitcoin exchanges such as WazirX. A Bitcoin ATM is a real place where you may purchase and sell Bitcoins with cash, unlike standard ATMs that allow you to withdraw money from your bank account. Many websites provide the option of purchasing Bitcoin in return for a prepaid debit card that works similarly to a standard debit card. Through a peer-to-peer marketplace, you may sell Bitcoin for cash faster and more privately.
How To Invest In Bitcoin?
Bitcoin may be invested in two ways: through mining or exchanges. Bitcoin mining is carried out by high-powered computers that solve challenging computational arithmetic problems that are too difficult to complete by hand and complex enough to tax even the most powerful computers. WazirX, a Bitcoin exchange, is another alternative.
Is Bitcoin Legal In India?
In India, Bitcoin is not illegal. Because of cryptocurrency's rapid evolution, policymakers and regulators seemed to have recognized the chance to accept the new technology early. From the infamous 'RBI ban' in 2018 to reports of an impending bill banning cryptos in 2021 that has yet to develop, India has seen its fair share of ups and downs when it comes to Bitcoin regulation. Last year, the Supreme Court Of India approved the use of Bitcoin throughout the country. According to the Supreme Court, the existence of Bitcoin or any other cryptocurrency is unregulated but not unlawful.
How Bitcoin Mining Works?
Bitcoin mining is a crucial element of the blockchain ledger's upkeep and development and the act of bringing new Bitcoins into circulation. It's done with the help of cutting-edge computers that solve exceedingly challenging computational arithmetic problems. Auditor miners are rewarded for their work. They're in charge of ensuring that Bitcoin transactions go through smoothly and legitimately. This standard was established by Satoshi Nakamoto, the founder of Bitcoin, to keep Bitcoin users ethical. By confirming transactions, miners assist in avoiding the "double-spending issue."
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
