Home Technology BTC, ETH, BNB Down: Lessons To Be Learned From Recent Crypto Crash

BTC, ETH, BNB Down: Lessons To Be Learned From Recent Crypto Crash

The past few weeks have been brutal for all cryptocurrencies. Even the best projects have crashed. The market cap of the sector which reached more than $2 trillion (approximately Rs. 15,610,304 crore) around March of this year currently stands at $892 billion (approximately Rs. 89,265 crore), according to CoinMarketCap.

At the moment, with the global economic situation facing recession-like conditions, investors have little appetite for risk. The recent crashes of Terra and Celsius networks also caused fear among investors.

This is how much the top crypto assets have fallen compared to their All-Time Highs (ATHs).

Bitcoin is down 70 percent Ether is down 77 percent BNB is down 68 percent Cardano is down 84 percent Solana is down 88 percent Dogecoin is down 92 percent Polkadot is down 87 percent

So, what are the lessons to be learned from the latest crypto crash?

HODL is not a good strategy

HODL (Hold On for Dear Life) is a popular concept in crypto investing. It means that you should never sell your crypto, especially Bitcoin.

People say that if you buy Bitcoin and then never sell it, you will become very rich!

Bitcoin has gone from nearly $69,000 (about Rs. 54 lakh) to $21,000 (about Rs. 16 lakh) in seven months!

Do you still think HODLing is a good strategy?

While it’s impossible to “time” the market, savvy investors know that all markets have bull and bear phases and you need to “enter” and “exit” the crypto market from time to time.

Buying the dip is not a good strategy

I hate the concept of ‘buying the dip’. This means that every time Bitcoin prices fall, you need to buy more Bitcoin!

This is an extension of HODLing.

It means that you believe that Bitcoin prices will continue to rise forever. So every time prices fall, you buy more.

This is a very bad strategy. There is no asset that is constantly increasing in value – not even gold or stocks or real estate.

With Bitcoin moving from nearly $69,000 (about Rs. 54 lakh) to $21,000 (about Rs. 16 lakh) in seven months, imagine buying the dip all the way from BTC’s last ATH.

You would have made huge losses in the end. As I said before, it is impossible to time the market. But savvy investors know that all markets have ups and downs. So you should never blindly ‘buy the dip’.

Do not blindly follow influencers

In a bull market, most cryptos go up. Even the bad projects!

So when social media influencers advise you to buy some crypto and the price actually rises, you might think they are super smart. No, they are not.

Crypto is a very tricky market. There are no ‘experts’ who always get it right.

Although I advised my community to sell before March 31, 2022, I didn’t see the Terra crash coming.

I had even posted why I was optimistic about Terra! And then Terra crashed and burned!

So do not blindly follow influencers. Always do your own research and remember that even the best projects can crash and burn in a bear market.

And when analyzing crypto projects, use the ROHAS method – check the project’s revenue, organization, history, algorithm and social community.

What now?

I don’t think this is the end of the entire crypto sector.

Cryptos will bounce back, but not all cryptos. Many weak projects and overvalued cryptos will fail.

There are more than 20,000 crypto projects and more than 4.5 million crypto assets. I expect 1 percent of them to bounce back strongly and 99 percent to fail.

If you are new to crypto, now is the time to participate in airdrops and learn and earn projects. With this you get free crypto and you learn the basics.

New crypto startups are using airdrops as a marketing strategy. They give free cryptos in exchange for promoting their website and social media accounts. You can get a list of the latest airdrops from sites like coinmarketcap.com and airdropalert.com

Many cryptos run small courses to raise awareness about their project. You have to watch a little video and take a little quiz and you will get free cryptos.

This is called Learning and Earning. You can also earn free cryptos by playing online games (Play to Earn) or even by walking (Move to Earn).


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