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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 Is The Meaning Of Bitcoin?
Bitcoin is a type of cryptocurrency that was first introduced in January 2009. It is invented based on the key concepts and notions presented in a whitepaper by Satoshi Nakamoto, a mysterious and pseudonymous figure. The name of the individual or people who invented technology is yet unknown. Bitcoin promises reduced transaction fees than existing online payment methods, and a decentralized authority controls it, unlike government-issued currencies.
Is Bitcoin Trading Is Legal In India?
In 2020, the Supreme Court of India lifted the RBI’s restrictions on cryptocurrencies. According to the Supreme Court, the existence of Bitcoin or another cryptocurrency is unregulated but not unlawful. The verdict has greatly aided the world of digital money in the country. To put it another way, investing in Bitcoin is perfectly legal, and you may do so through various apps and traders.
Who Created Bitcoin?
Bitcoin is the first application of the concept of "cryptocurrency," first articulated in 1998 on the cypherpunks mailing list by Wei Dai, who proposed a new form of money that relies on cryptography rather than a central authority to manage its creation and transactions. Satoshi Nakamoto published the initial Bitcoin specification and proof of concept on the cryptography mailing list in 2009. Satoshi exited the project in late 2010, with little information about himself available. Since then, the community has evolved, with numerous people working on Bitcoin. Satoshi's anonymity has sparked unfounded fears, many of which may be traced back to a misunderstanding of Bitcoin's open-source nature.
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 To Make Bitcoin?
Bitcoin mining is not just the process of putting new Bitcoins into circulation, but it is also an essential part of the blockchain ledger's upkeep and development. It is carried out with the assistance of highly advanced computers that answer challenging computational math problems. Miners are rewarded for their efforts as auditors. They are in charge of ensuring that Bitcoin transactions are legitimate. Satoshi Nakamoto, who is the founder of Bitcoin, innovated this standard for keeping Bitcoin users ethical. Miners help to prevent the "double-spending problem" by confirming transactions.
How Much Is 1 Bitcoin Worth Today?
Check out the current price of Bitcoin on the WazirX exchange. Bitcoin's value is primarily determined by its supply and demand in the market. Other elements have an impact on its worth. Its intrinsic value can also be calculated by calculating the average marginal cost of producing a Bitcoin at any given time, based on the block reward, electricity price, mining hardware energy efficiency, and mining difficulty.
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 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.
Is Bitcoin Safe And Legal In India?
In 2020, the Supreme Court of India lifted the RBI’s restrictions on cryptocurrencies. According to the Supreme Court, the existence of Bitcoin or another cryptocurrency is unregulated but not unlawful. The verdict has greatly aided the world of digital money in the country. To put it another way, investing in Bitcoin is perfectly legal, and you may do so through various apps and traders.
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
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.
