Five Strategies for a Crypto Ice Age
As trading slows down, there may be months where nothing interesting happens – here is how to make the best of it.
In March 2018, crypto markets are at a crossroads. On one hand, new projects are developing, and there is a whole new crop of promising altcoins. On the other hand, Bitcoin seems to be slowing down, in both transactions and trading volumes.
There may be various reasons for it, but for weeks now, the crypto market has been drifting away from the December peak prices and high volatility. Altcoins keep trying to find their meaning, and show that they can coexist with Bitcoin, and even chart their independent success paths without trading against the King of Crypto.
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Yet in the months to follow, mainstream users may lose interest again, as it has happened in years past. But there is a lot to do and the crypto community remains active even as prices barely move. Here are the top 5 things to do in case prices stagnate for longer:
- Actually spend crypto coins: If a coin performs a 10-fold increase in a week, this may make spending it quite a daring experience. Not to mention that hot new coins sometimes do not have reliable wallets and spending infrastructure. But in a crypto coin stagnation, the price may be rather predictable. So go out and spend those coins – Litecoin has started a drive to do just this, with the #PayWithLitecoin tag. And in case you also want to keep owning coins, you can always re-buy them at almost the same value. Don’t make predictions on how you would end up owning a $30,000 laptop – such gains are still rare, and not so easy to realize in fiat. Besides, spending coins may increase their popularity and in effect, raise the market price down the line.
- Learn more about the technology: Now is the time to set up good housekeeping when it comes to crypto coins. Too many new investors have bought coins and kept them on exchanges. When a coin’s price hovers for months without much change, it is possible to perform due diligence, learn about the best wallets and set up a plan to protect and secure the asset, as well as avoid mistakes and failures. When there are no coins running hot at the moment, it would be much easier to select digital assets with good fundamentals, instead of jumping on a rocket that later crashes.
- Keep trading: It is possible to keep trading, while settling for much tamer price increases. Some assets will always need to be traded at some point. With a less volatile market, some coins may become good training ground for traders. Just don’t go overboard with investments. Exchanges have a trend toward relying solely on crypto coin pairs, as carrying fiat has regulatory repercussions and may be too expensive. Yet crypto trading pairs may lead to meaningful gains for a preferred coin.
- Hold onto the coins: This is the no-brainer solution, or, as it is often called in crypto communities, “HODL”. Try to forget about the coins for a while, except make sure you do not forget how to derive the private keys, and keep passwords and PINs in secure cold storage. Investing in a hardware wallet may be a good idea at this point. Again, keep it well and have a copy of seed phrases and PINs.
- Make bets on cheap coins: The best thing about crypto coins are underpriced assets that go on to grow to phenomenal peaks. In case of generally subdued trading, there may be many more sleeping opportunities to spend $100, even $10 on, and wait for better times – years, if needed. Just make sure the coins chosen are technologically viable, and can be kept in a safe wallet.
Storing potentially valuable coins on exchanges that do not even allow withdrawals at all times may be unwise. Exchanges close, remove coins, or simply disappear. Make sure your coins don’t disappear as well. And in 2018, there are ways to accumulate coins for almost free, through airdrops or bounty programs. Make use of those free opportunities while they are relatively unknown.
Some believe the crypto market remains cyclical, and due to the relatively small scale, more prone to a dramatic expression of both enthusiasm and pessimism. Yet in both cases, there are gains to be made, or at least lessons to be learned.
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