Whether you are new to crypto trading or an experienced investor, you already know by now that the crypto market constantly rises and falls. The crypto OGs get it, and that’s why they find the best ways to protect their funds from further decline when the market dumps.
In other words, you also want to find ways to hedge against further dips or even make more money during the bad days. So, should you buy the dip like people say or buy stablecoins like USDT to protect your money? We have all the answers. Now, let’s get into it!
What is a Dip in Crypto?
A crypto dip is when the price of a cryptocurrency drops in value.
Dips happen everytime – just like in stocks and even real estate, crypto prices change every now and then. This cycle is what makes crypto trading and investing interesting, as it offers different opportunities to make money.
But, price dips also become serious when they last for too long.
Is a Dip the Same as a Crypto Bear Market?
A dip is a fall in the price of a certain cryptocurrency that often lasts a short period. On the other hand, a bear market exists when a coin loses more than 20% of its highest value within 60 days.
Think of a bear market as a Crypto Dip Pro Max. Basically, it’s marked by two things:
- Longer periods of low crypto prices
- A drop in the demand and an increase in the supply of crypto assets
Take Bitcoin, for example. In October 2021, Bitcoin his its all-time high of $69,000. But, it has since fallen back to $27,000. Considering that this is almost a 70% drop and the dip has sustained for about two years, we can kind of say we’re in a Bitcoin bear market right now.
How to Protect Your Money When Crypto Prices Are Down
Bear markets are challenging times for even the most experienced crypto investor. Nobody wants to see their portfolio value dropping. The worst part is that you can do nothing to change the market conditions during a time like this. Well…except you’re a crypto whale.
But, here are 4 ways to protect your money when crypto prices crash.
1. Pull Out of Investment Sites
The first thing you should do in a crypto bear market is withdraw your money from risky crypto investment schemes. This way, you protect your money and can control it – not anyone else.
2. Buy Stablecoins
A stablecoin is a cryptocurrency pegged against a currency or fixed asset like US Dollars, Euros, and Gold. Today, there are several stablecoins on the market – USDT, USDC, BUSD, etc. – whose values are pegged to the Dollar.
And, even better, you can buy them on Quidax.
Stablecoins are perfect for crypto bear markets because their prices aren’t volatile like other cryptocurrencies. So, you can convert your assets to stablecoins during a bear market to protect them from losing value.
3. Take Advantage of The Volatility
You must have heard people say, “Buy the dip.” Well, a price crash is exactly when you need to do this.
Now, for most people, buying coins in a bear market doesn’t make much sense. But, it could just be what you need. Since crypto prices are down during the bear market, some investors buy more assets at low prices and HODL till the market recovers. This way, when prices rise again, they benefit!
Before buying the dip, though, remember to do your research. Not all cryptocurrencies recover from a price drop, so be careful.
4. Wait it Out
Sometimes, the best way to protect your money during a crypto price crash is by doing nothing. If you don’t have the stomach for it, just leave your coins and wait out the storm.
Remember – every winter comes to an end.
Final Thoughts
Now that you know the different ways to protect your money from reducing in value during a bearish market, the next thing to do is take action. Whether you want to buy the dip or invest in stablecoins for more peace of mind, the best place to consider is Quidax.
Here at Quidax, our goal is to ensure you buy cryptocurrencies instantly without stress. You can also check out our free crypto academy course to get a better understanding of crypto trading and brace yourself for the journey ahead.
