Crypto trading during the coronavirus | The Burn-In

Crypto trading advice during coronavirus

A return to how life was at the beginning of this year isn’t near. Even when some of the restrictions are eased, the coronavirus pandemic will continue to affect our everyday lives. Besides this, COVID-19 is also impacting the economy. Right now, the markets are very weird and the full extent of the damage the pandemic will have on it is impossible to predict. Therefore, traders and investors have to focus on higher-than-usual volatility. This may even become the new norm. 

An asset that fits the description is digital currencies and we may see more people getting into crypto trading in the next few months. But how do you trade with crypto through the coronavirus? Read on to find out.

Don’t Let Emotions Dictate Your Crypto Trading

Even before the coronavirus, many traders saw times of volatility as the norm. In other words, these people look at periods of volatility and uncertainty as an opportunity. They have created strategies for times like this and use the opportunity to pump money into their bank accounts. If you take a look around the web, you’ll see plenty of traders talking about taking the opportunity and getting rich during the pandemic.

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While this isn’t impossible, the chances of doing it are a lot lower than some people would have you believe. This, of course, doesn’t mean you shouldn’t trade during the pandemic. However, should you be extremely cautious about all your moves? Yes. What we’re trying to say is that uncertainty and recession aren’t necessarily the best times to trade with huge leverages. Growth of potential profit often blinds traders and makes them make trades they end up regretting.

So, the crypto market is doing well at the moment, and buying digital currencies is a good idea. However, there’s no need to trade with large leverages and take too much risk. Keep doing your usual thing and things will work out just fine.

Respect Crypto Trading Trends

It’s common for traders to form their own mindsets and block opposing ones. This is never a good idea, especially during a crisis. Sometimes, crypto traders are 100 percent confident of a price move that never happens. In situations like this, there’s no point in trying to argue with the market. The market does NOT have to align with your vision. Adapt that mindset during the pandemic and trading may look more difficult than it ever was. Instead, be respectful towards market trends and rely on them when making your moves.

Another huge mistake traders make is to seek similar mindsets on the web. There are so many crypto-analysts on Twitter, and all it takes is one click of a button to start following them. They may know a lot about digital currencies but learning their true motivations is impossible.

Following your gut and crypto-analysts can work but in times like this, respecting the trends is the way to go. If you want this to work, it’s critical to keep an eye on the market and look for new trends yourself. This may require some extra work but increasing your chances of making a profit is worth it.

Consider Alternative Ways to Make Money via Crypto

Trading isn’t the only way you can make money through digital currencies. Unlike stocks, crypto is quite versatile and there are plenty of things you can do with it.

At the moment, many traders are simply afraid of trading. They don’t know how the market will move and they want to avoid taking too much risk. If you’re one of them, consider one of these alternative ways to make money through crypto. For example, there are android games you can play to earn Bitcoin or make price predictions on a popular platform. Another amazing idea includes staking coins and earning interest.

Right now is the perfect moment to explore all of these avenues. Prices are low and volatility is high, and taking advantage of it makes a lot of sense. Instead of worrying about what will happen with the market, you can hedge and make some extra crypto. This strategy has no downsides and it can keep you occupied until things are back to normal.

Don’t be afraid to try something new and you may end up making more than you would make trading. In addition, you may also discover a new long-term strategy for earning digital currencies.

Keep Some of your Portfolio in Cash

Every trader needs an emergency fund. It’s impossible to predict emergencies and having some cash on you can be a real lifesaver. But at the moment, forget about emergency funds. Let your emergency fund sit on your bank account and start keeping some of your portfolio in cash. 

Experts recommend treating cash as an asset in your crypto portfolio. Let’s say you’ve invested in Ethereum. Instead, of putting all of your money into this digital currency, you keep a part of it in cash. That way, the value of your crypto portfolio will rise even if the price of Ethereum drops. This is because, at that point, cash is “beating” Ethereum.

If you’re not sure this is the right approach to take, just look at some of the best investors out there. There’s a reason why Warren Buffet is sitting on a $125 billion in cash. He can use that money to purchase assets at the right time and make more profit. You can do the same with crypto. Keep some of your portfolio in cash and use it when the opportunity arises. Act quickly and you’ll have more money once the pandemic ends.

Don’t be Afraid to Change Sides

The COVID-19 pandemic changed the way the world works. Everything is changing daily, making trading tougher than usual. During a crisis like this one, over-leveraging is never a good idea.

Some investors don’t like to “switch sides” and they prefer sticking to their investments. If you want to profit through the coronavirus, doing it might be necessary. Let’s say you’re long on XRP and you’d like it to stay that way. Suddenly, you notice huge sell-offs due to the pandemic. What do you do? Right now, your safest bet is to follow the trend, switch sides and short XRP. It may not be what you initially planned but it’s the only way to profit.

This is also a good time to dip into some new waters. The more digital currencies you trade with, the easier it’ll be to find a currency worth buying. For example, if you’ve never traded with Bitcoin, learn how to do so and start trading with this asset. You can find all the information online and learn everything there is about eToro Bitcoin trading in no time. That way you’ll be able to buy this currency and switch sides if you need to.

Don’t Forget to Diversify

Every investor should diversify their portfolio. Investing all of your money in the same asset doesn’t make sense, even if you’re investing in crypto. Digital currencies are on the rise right now and investors buy it for portfolio diversification. However, you can use this opportunity to sell some of your crypto and buy other assets for cheap. Whether we’re talking about stocks or real estate, now is the right time to make your move. If you know where to look, you should be able to find all of these assets for less than they’re usually listed for.

Similarly, this is the right moment for other traders to buy digital currencies. If you’ve never traded with crypto, now’s your chance. Crypto is the “new gold” when it comes to portfolio diversification and most traders prefer buying it over precious metals. Why? Well, there are no logistics to deal with which makes trading with crypto much easier. When the pandemic started, traders stated panic-buying gold but soon they found all the borders shut down and transportation became an issue. It didn’t take them long to turn to digital currencies that can be moved with just a few clicks of a button.

Whether you’re a crypto trader or not, now is the right time to diversify your portfolio. In times like this, this is a much safer option than being 100 percent invested in one thing.

The Bottom Line

The coronavirus scare has had a huge impact on the economy. It’s safe to say traders and investors will from now on be more cautious with their moves and some new trends will arise. Crypto is, without a doubt, one of the assets that have done amazingly well during the pandemic, and more traders will look to jump the bus and start buying it. Expect the popularity of crypto to skyrocket after the pandemic. With that said, now’s the perfect time to start trading with digital currencies. Rely on the tips covered in this post and making all the right moves won’t be tough.

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