If you are struggling to know the most crucial factor to focus on before taking further actions in the crypto market is nothing other than Security.
This post will focus on three essential security principles and things to do in the crypto bear market.
3 Security Principles in Crypto
1. Maintain your privacy
The internet allows information to propagate quickly and sometimes in undesirable directions.
There are plenty of people with malicious intent employing nefarious tactics in an attempt to steal your cryptocurrencies.
Most threats and attacks are typically broadly targeted and work as a net to catch everyone gullible and distracted, but not necessarily targeting a specific individual.
However, more sophisticated and focused attacks are possible if you unintentionally make yourself a target by revealing sensitive information.
2. Protect yourself
Users of the traditional banking system and cryptocurrencies are often victims of similar scams and frauds.
However, with cryptocurrencies, various factors are pushing the burden of responsibility on the shoulders of the end-user, mainly an inherent lack of trust and immutability of processed transactions.
3. Be your bank
Holding your private keys offline is recommended to ensure the availability of your coins and maximise your security.
Although exchanges are generally much safer than ever, keeping substantial amounts on the exchange accounts is recommended only if you are an active trader.
Furthermore, similar to money in a bank account, unless you own and have exclusive access to your private keys, you cannot claim ownership of your coins and are left with a promise.
2 Things to Do in a Crypto Bear Market
It’s challenging to hold your nerve as crypto assets print double-digit losses. But don’t bury your head in the sand; follow these simple steps and make the most of this bear market opportunity.
1. Buy the crypto dip using dollar-cost averaging
A slow and steady approach is the way for a long-term investor. That’s where dollar-costing averaging can come into play, as it helps you focus on the benefits over time rather than the ups and downs of a day or week.
The strategy involves dividing your total investment into small increments and regularly investing them in the market.
For example, if your yearly goal is to invest $1,500 into Bitcoin, you would contribute around $125 a month. But you can break those contributions down even further to be weekly or daily.
2. Diversify your investments across different crypto assets
Diversifying your crypto portfolio involves investing your money in various crypto projects to reduce risk if one or more projects perform poorly.
A diversification strategy also allows you to achieve the best returns even when some portfolio items perform poorly.
The following are the primary reasons why you should consider diversifying your portfolio:
- The crypto market is highly volatile. Diversification protects against unexpected negative market swings.
- It increases the chances of your cryptocurrency investment prospering.
- You can’t rely on a single cryptocurrency, such as Bitcoin, to provide reasonable returns.
- It enables you to make the most of multiple coins that are performing well simultaneously.