One of the risks that may occur in the investment world is falling market prices. A market crash is a condition in which the stock market is mostly bearish, or corrected for a long period of time, resulting in a drastic price drop.
So is cryptocurrency still an investment you can choose this year? What types of cryptocurrency investments can you use in the face of a cryptocurrency market crash? Read more below!
One example of a market crash case is the decline that has occurred in Terra Luna coins since January 2021. Last June there was a decrease in the market cap of US $ 400 billion and the elimination of Terra Luna coins of US $ 500 million from the crypto market in May 2022.
No stop there, on July 4 there was a decrease in the price of Bitcoin from US $ 40,000 to US $ 19,000. This proves that in 2022 the crypto market is experiencing a lot of decline and a market crash can massively hit all investment assets, including crypto.
Another example of a recent crypto market crash is the drastic decline in the value of Bitcoin in May 2022 and continuing to decline in June. Supported by data that decreased by 90% in 2018, many speculated that large crypto assets, such as ETH, could experience the same thing. The thing that distinguishes Luna coins is that ETH and BTC have a more stable ecosystem so that their value will rise again in the future.
How to Deal with a Market Crash
Investors must understand what to do in the event of a market crash. Here are the steps you can take if you experience this:
. The decline in asset prices is usually accompanied by rumors or negative sentiments. This makes the market panic and immediately sell their assets without thinking about the potential in the future.
In the event of a decline in assets, try to calm down and analyze for a moment what is going on in the market so that you can make a cool-headed decision. With the ability to control panic, you can have more time to analyze and also make the right decisions.
2. Avoid Panic Selling
Asset prices can change at any time, either a drastic decline or even a rapid increase. This possibility can usually be seen after you do an in-depth analysis. Therefore, it is better for you to postpone selling assets in a hurry. Whenever possible, keep your assets and wait for prices to return to normal.
3. Use Cold Funds
money that is not used for needs in the near future can also be referred to as money that can be used without worrying if there is a sudden need for financing. Most people who panic when they experience a market crash are those who use their daily necessities as capital. By using cold funds, you can also be more calm in making decisions when investing.
Type of Investment during a Market Crash
In general, the impact of a market crash will be greater if you are a trader than the type of investor who uses deposit options or other types of investment. Therefore, choose the type of investment that is safer and more protected.
Your assets will continue to grow if you choose the type of long-term investment that promises a yield so that it can be separated from the falling market price. There are several types of crypto investments that you can choose from to deal with market crashes such as deposits and staking available on the crypto investment platform Tokenomy Earn. Let’s learn in more detail!
A. Fixed Deposit
The lowest risk financial instrument found in Tokenomy is Fixed Deposit. Not only low risk, Fixed Deposit can help investors grow their crypto assets at a fixed rate of interest.
Crypto assets will be able to grow regardless of the ups and downs of the market price if you make a deposit. This makes it suitable as a type of long-term investment. Deposits can start from IDR 500,000 and yield up to 7% per year.
Staking is a passive income by saving your funds to participate directly with the transaction validation system. The transaction takes place in the crypto blockchain with a Proof of Stake (PoS) algorithm. Basically, you only need to lock your assets on the Tokenomy Earn platform and get rewards in the form of interest or crypto coins if you successfully validate the system. Profits from asset locking can reach 3-5%.
C. Dual Currency Deposit
Dual currency deposit or what is often referred to as a dual currency deposit is a derivative investment instrument in the financial sector. Currency deposits combine money market deposits with currency options to provide higher yields than is available for standard deposits.
This type of investment is classified as a high-risk investment type and is carried out in the short term. However, the yield obtained can reach more than 100%. For crypto investors who want to do DCA (dollar cost averaging), this type of investment is the right product because investors can earn additional interest while waiting for the desired target price to buy crypto assets to be achieved.
Of the three types of investment above, which one do you choose? Come on, immediately register yourself to Tokenomy Earn!