The Lessons We Need To Learn From The Crypto Crash

On the face of it, the entire crypto ecosystem has spiralled out of control downwards, where many may see risk, I see opportunity, if only we learn from the crash.

The crypto crash was a shock and many lost huge amounts of money. But as shocking as it was, the one thing we can all do is learn from it. I am a firm believer that education is key to success and if we use this crash to make better-informed decisions next time we invest, we can look to be smarter next time around. 

I have always said that cryptos are going nowhere and even as I write this, BlackRock, the world’s largest asset manager, with US$10 trillion in assets under management, has partnered with the world’s biggest Crypto exchange, Coinbase. This news shows how the markets are beginning to recover and there are big things ahead.  

So, here’s what we can learn from the crash and the strategies we can implement for future investments. 

How the future of crypto and blockchain might pan out

There will come a period of sudden growth and revitalisation in the markets, and it is worth anticipating incentives such as ‘Bitcoin Halving’ may come into play. Bitcoin halving is the process of imposing synthetic price inflation in the cryptocurrency’s network and cutting in half the rate at which new bitcoins are released into circulation. This makes the supply lower therefore the price to purchase is higher. 

There are many advantages of cryptocurrencies. For instance, Solana in comparison to Ethereum is faster and easier to utilise but as its bandwidth is overloaded with the number of transactions per second so it can be slower. In addition, investors and traders are taking their crypto investments off the market to the ‘wallets’ which are essential to buy, trade and sell cryptocurrencies. Each trader and investor’s wallet has its own number, code and password to validate and protect the transaction but taking crypto investments off the market can give a warped view of the overall volatility. 

Which crypto exchanges are experiencing catastrophe and why this may have been written in the stars?

Some crypto exchanges such as kucoin and Huobi have financial problems therefore it is safer to transfer the shares to the bigger, more credible crypto exchanges such as Kraken and Coinbase. This is really just common sense and I always advise any new traders to stick to the top ten coins as a starting point as they are more stable and less prone to fluctuations. 

What you should do if Bitcoin drops to $10k and why

This is not the end of the financial crisis since markets will constantly fluctuate. The dips are expected, and more are expected in the future. An investor can take advantage of this situation by selling the shares short-term. If bitcoin drops to 10K, I suggest that investors should cautiously monitor the market and buy (accumulate) more shares taking into account that there will be periods of growth in the future. 

Why being liquid is so vital to your success as a trader/investor

The liquidity allows investors to use the market opportunities, for instance buying or selling the ‘one-off items that are not expected to recur, and which therefore do not constitute part of a trend.  In the same regard, the crypto market being liquid enables investors to react quickly to the dips and peaks in the market. 

As I said before, this is not the end of crypto, it is only the beginning and I still believe there is a lot of money to be made for savvy investors. When the markets are low, huge opportunities appear to make good profits; buy low, sell high, that’s our motto. 

About the author: Renowned stock market and wealth educator, investor, and entrepreneur Marcus de Maria is the Founder and Chairman of Investment Mastery, one of the world’s leading investment and trading education companies. 

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