CoinSwitch boss pens down 5 mantras for crypto investors in bear market

Synopsis

Evaluate fundamentals of an asset, avoid leverage in volatile phases of the market, factor in your risk appetite, avoid acting on random tips and do your own research are his five mantras for investing in cryptocurrencies.

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New Delhi: Major cryptocurrencies have dropped between 15 and 40 per cent in the last one week and the total market capitalization of the crypto market has wiped out about $1 trillion of investors’ wealth. Bitcoin has dropped about 50 per cent of its value from the peak, whereas other altcoins including Solana, Cardano, Polkadot, Fantom, Near Protocol have lost about two-third of their value in the latest round of correction.

Commenting on the crypto carnage, Ashish Singhal, Founder & CEO, CoinSwitch Kuber, India’s largest crypto platform, said the current trends are a reflection of swings in global financial markets and news of regulatory proposals globally. Several early investors in crypto have also been booking profits, he said in a series of tweets.

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Recently, Russia’s central bank proposed a blanket ban on mining and use of private cryptocurrencies. Biden administration is also said to be working on a bill to regulate crypto assets.

In 2021, crypto held firm during the peak pandemic and brought in an era of NFT and metaverse tokens, Singhal said. NFT sales have rocketed lately and volumes nearly touched the $25-billion mark.

It is not the first instance when Bitcoin has shown such a sharp fall. In 2014, Bitcoin fell to $200, dropping as much as 86 per cent in value. In March 2020, when the pandemic was at its peak, it dropped to $4,500 from $9,000. In 2021, it hovered around $68,000.

“The drawdown phase or the bearish market can feel scary. A lot of people lose money too. Investors who have stuck through the lows in the past have seen massive benefits when the market turns bullish,” said Singhal.

“Of course, your ability to stick depends on your overall financial portfolio which should be built on fundamentals like emergency fund, life and medical cover, disciplined goal-based investing.”

Singhal advised investors to think long-term and avoid emotion based decisions.

Evaluate fundamentals of an asset, avoid leverage in volatile phases of the market, factor in your risk appetite, avoid acting on random tips and do your own research are his five mantras for investing in cryptocurrencies.

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Updated: 01/25/2022 — 15:00