Owning cryptocurrency can be torture when you are constantly seeing fluctuations in your coin’s value. If you find yourself constantly watching the value of your cryptocurrency, check out these 4 tips to help calm your paranoia.
1.) Remind yourself to think long term.
When cryptocurrency prices fall, it’s easy to immediately feel like you have lost money. This could cause you to sell your coins as soon as the price drops below where you bought it. When prices do fall, (and they most likely will) just remind yourself that cryptocurrency is incredibly volatile and will likely go back up in the coming days or months. The money isn’t a lost until you sell it for a loss.
2) Think of your cryptocurrency as money already spent.
Although cryptocurrency prices have historically risen after every fall (not including the dip we are currently in obviously), that is based on a relatively short amount of time. Even Bitcoin, the oldest cryptocurrency, has only been around since 2009. Big gains come with big risk, and cryptocurrencies are definitely a big risk. Invest as much money as you are willing to lose.
3.) Keep cryptocurrency a specific (and small) portion of your portfolio.
The biggest problem when I began buying cryptocurrency was I never knew when to stop buying. Since prices were falling, it always felt like a good time to buy. Although this wasn’t a horrible mindset, it easily led me to investing twice as much as I intended. Decide how much you want to invest, and what portion of that you want to be in cryptocurrency. This could be a set amount of money that you convert to cryptocurrency and then hold, or small chunks every few paychecks. Remember, never keep all your eggs in one basket. And, no, just investing in many types of cryptocurrency does not give you a diversified portfolio if that is all you are invested in. Don’t stop putting money in stocks just because you are also investing in Bitcoin.
4.) Invest smaller chunks over a wider period of time.
Even people who closely watch and analyze cryptocurrency prices often make mistakes or incorrect assumptions. Just like with stocks, it’s often a losing game to try and time the market. Putting smaller amounts of cash in over a wider period of time will help lessen your fear of missing out if prices drop.
Be careful of putting too small of sums in too often however, because many wallet companies-such as Coinbase- have a flat fee for every cryptocurrency transaction.
What tips have helped you stop the endless cryptocurrency stress cycle?